Keywords: interpersonal trust, entrepreneurship, microfinance, institutional trust, Brazil, relationship banking, community banks, bottom–of–the–pyramid communities, BoP
Institutional and interpersonal trust and entrepreneurship: insights from relationship banking and microfinance in Brazil
We examine the value of trust in entrepreneurship by addressing the context of microfinance. We investigate the cases of three community banks providing microfinance in bottom–of–the–pyramid communities in Brazil. Using qualitative methods, we find that institutional trust seems to facilitate the operation of microfinance organisations that support entrepreneurship, while stimulating consumption within a community and the development of local small businesses. Additionally, interpersonal trust seems to facilitate the development of formal and informal businesses.