Exploiting experimental variation in repayment meeting frequency across micro nance
groups, we show that mandating more frequent interaction reduces social distance
between group members and enhances their social capital: Relative to groups which
meet monthly, members of groups that meet weekly exhibit greater pro-social behavior
towards each other as measured by willingness to cooperate in trust games one year
after the end of the loan cycle. Higher expectations of reciprocal behavior by group
members due to improved ability to monitor each others’ actions rather than greater
altruism or learning about types appear to drive this result.