On Monday I posted on the Kiva Fellows blog about how Microfinance might make borrowers more fair. A New York Times Op-Ed by David Brooks indicates it may also make them happier. Brooks provides a quick overview of the current state of research on happiness. As one would expect, rising from poor to middle class has a significant positive effect on happiness (although going up from there does not).

Less obvious is the link between socializing and happiness. Brooks notes that joining a group that meets just once a month can increase happiness as much as doubling income. Microfinance is a heavily social lending model. Many MFIs use solidarity groups (that meet once or more a month) to encourage repayment, provide emotional support and facilitate information exchange. Other MFIs conduct educational classes or spiritual meetings. All in all, there are a number of ways in which MFIs encourage social interaction as well supporting income growth. The social component may well be as important as the financial one when it comes to making borrowers happier.