Eli Meyer: Community Banking, Conflict and Cooperation in Nicaragua

Since the electoral defeat of the Nicaraguan FSLN in 1991 and, more recently, during the municipal elections in November 2008, community violence has been increasing due partly to the importance individual community members attach to political party affiliation. Community violence in this context includes rioting, stone-throwing, vehicle-burning, and machete attacks.  With recent changes in the national and municipal political maps, partisan identity becomes a real source of conflict between families and communities.

My study uses a concept known as “associational engagement”—the interaction of community members within clubs, civic groups, or community associations—as a way of building larger community cooperation.

When dealing with violent conflict, whether in Rwanda, Palestine, or Colombia, community members have found varying levels of peace-building success by engaging in activities that build bridges between two contesting cultural identity groups.

I look at similar activities, namely community banking groups, within the Nicaraguan context. Specifically, I conducted in-depth interviews with groups in two rural communities in northern Nicaragua.  Both communities have community banking groups, share similar demographics, economics, and political histories. One community experienced high levels of violence during the 2008 municipal elections, however, while the other did not.

Interviews with members of the community banks as well as community members not participating in the banks point to two very different experiences with associational engagement. The research results correlate overall community solidarity, and by extension, propensity for violence, in part to the communities’ experiences with community banks and other forms of civic engagement. According to the personal experiences of community members, the community bank that was formed to “fit” the values of the specific community and that remained flexible to the needs and feedback of bank participants seems to play a significant role in bringing the community together, increasing social capital (to the extent that this can be measured), and protecting the community from surges in political violence during elections. Conversely, the bank that modeled more rigid policies and limited community participation in day-to-day management correlates with the community’s sense of loss of solidarity, member’s suspicion of each other, and increased propensity for

The purpose of the study is not to simplify the experiences of complex communities or show any unique cause for political violence in these communities, but rather to shed light on an important factor in the formation and breakdown in community cohesion that ignites political violence. This study shows that community banking groups, ubiquitous in much of the global South, can represent a form of associational engagement that builds community cohesion. However, like any type of civic engagement, the community banking group must represent the culture and values of the constituent community.  Otherwise the bank runs the risk of further dividing the community and creating more space for partisan violence.