Negussie, Taye (PhD)Aabay, Muluget2018-09-242023-11-182018-09-242023-11-182006-07http://etd.aau.edu.et/handle/12345678/12191The purpose of thi s study is to assess the relation ship between social capital and group based micro finan ce. Ea rli er studies have predominantly focused on the impact of microfinance schemes on the livelihoods of the participants. Much att ention was not paid to the social processes underl ying the group based microfi nance. Therefore, this research has been initiated to fi ll the knowledge gap that exists in this particularly important area of development. The research was conducted by taking the activities of Dedebit Credit and Saving Institution at Mekelle zone of the Tigray regional state. This microfinance institution is one of the pioneers on the practice of group based microfinance in Ethiopia. The objective of the study was to examine different dimensions of social capital as they pertain to the group-based mi crofin ance. Specifically, it was aimed at stud ying the social rel ationships th at may exist between the borrowers themselves (before, during and after their involvement in the microfinance institutions) on the one hand; and the lender-borrowers relationship on the other hand. In order to undertake this research, daia collection has invol ved methodological triangulation or a combination of d ifferent methods. However, the major research method employed for thi s study was inte rviewer-admini stered survey research. To augment this method, individua l intervielVs, personal observations and focus group discussions were includ ed . Relevant literature and essential documents were also extensive ly consulted as sources of secondary in fo rmation . Thc finding of the study shows th at peop le be long to a number of local ICIT I assoc iations and know each othcr a great deal. These are the major sources for people to I·orm microfinancc groups. It al so indi cntes that the microiiuancc institution does not pay much <1ltcn tion to the local lel·el associations by lI·al· of introducing them in to its Olin program. The otller major iinding of Ihi s study is that social capital- in thc form of trust and rL'Cip rocity; group norms and san ction s: ,,,,<1 co lkcti\'c decision Illaking- is fnund tl) be' important rt'S l111rce in maintaining theWith regard to the lender- borrowers relation, majo rity of the respondents have indicated that they rarely get the necessary noncredit support, neverth eless they have a trust in the in stitution for its transparent way of doing things. The conclusion of the study is that the Group Based Microfinance in DECSI could be more viable option to the poor when it is complemented with taking fu ll advantage of social capital elements at group format ion stage and the necessary lender' s support to clients after groups have been formed. Key wOl-ds: Social Capital , GBMF, DECSI, Group, tru st, normsenSocial CapitalGBMFDECSIGrouptru stnormsThesis