SOCIAL STATUS THROUGH INFORMAL CREDIT MARKETS: AN EXAMPLE FROM RURAL NORTHWEST PAKISTAN

One of the characteristics of traditional village system in the developing countries is strong interdependency of people for their social, economic, and political interaction. People have high degree of interrelationship and the concept of mutual help strongly prevails in their village life. Social festivities and celebrations are important elements of the village life that maintain socio-political position of people in their respective areas. On one hand, these festivities are taken as societal obligation and on the other hand as means of self-definition and self-recognition in the society. The social status and position of people in the village system is determined by the level at which they celebrate different festivities. To maintain this status, people in the traditional village system often need credit to finance different festivities. This study which was conducted in 2005-06 in rural northwest Pakistan, determines informal credit market as means to meet the end of attaining social status though celebrating social festivities. The findings of the study reveal that informal credit market is a reliable and easily accessible source in the area, especially for the low income strata in order to finance social festivities and to keep their social heritage alive.