The Structural Weight of Social Identity: Evolution of Informal Credit Networks in SAT India, 2007–2013

Local social boundaries shape everyday economic exchange in rural India, yet it remains unclear whether these boundaries weaken or reconfigure as markets and outside options expand. This paper studies how informal credit networks reorganise over time in a semi-arid village economy, focusing on locally recognised social groups (Hindu jatis and religious minorities). Using complete household-census network data from Kanzara (Maharashtra) collected in 2007 and 2013, we map borrower–lender ties across groups and estimate stochastic actor-oriented models of tie evolution. We document substantial turnover in credit relations and a diffusion of lending prominence across households and groups. Yet group-based segmentation remains strong: within-group borrowing persists and several across-group pairings remain unlikely even after accounting for proximity, wealth, and non-credit economic and social ties. Overall, the set of prominent lenders changes over time, but the pattern of within-group and across-group borrowing remains strongly structured by local social boundaries.