Can economic ties positively influence social relations and actions? If so, how does this influence operate? Microfinance programs, which provide credit through a group-based lending strategy, provide the ideal setting for exploring these questions. This article examines whether structuring socially isolated women into peer-groups for an explicitly economic purpose, such as access to credit, has any effect on the women's collective social behavior. Based on interviews with 400 women from 59 microfinance groups in West Bengal, India, I find that one third of these groups undertook various collective actions. Improvements in women's social capital and normative influence fostered this capacity for collective action. Several factors contributed to these transformations, including economic ties among members, the structure of the group network, and women's participation in group meetings. Based on these findings, I argue that microfinance groups have the potential to promote women's social capital and normative influence, thereby facilitating women's collective empowerment. I conclude by discussing the need for refining our understanding of social capital and social ties that promote normative influence.
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