Association membership and access to formal finance in rural Burkina Faso: the role of social capital

This article analyzes the relationship between social capital and rural households’ access to formal finance in Burkina Faso. Social capital is understood through household membership in groups or associations. Given the possibility of a simultaneous relationship between association membership and access to formal finance, the analysis employs a conditional mixed-effects model as the primary analytical tool and a recursive bivariate probit model for robustness. The data used come from the harmonized survey on household living conditions conducted in 2021. The results show that membership in a group or association is significantly associated with a higher probability of access to formal finance. They also reveal that the gender of the household head, income and education level are significantly associated with this access. These results suggest that rural community organizations can be an important lever for promoting financial inclusion, provided they strengthen their governance, inclusiveness and links with financial institutions. This research contributes to a better understanding of the factors associated with financial inclusion in rural areas and highlights the potential role of social capital in improving access to formal financial services.