Abstract:
Households in rural Sri Lanka are increasingly turning to multiple income sources
to cope with unstable economic conditions, intensifying climate threats, and reduced
farm profits. Social capital is broad, encompassing networks, norms, trust, and other
social relationships that can be used to coordinate and cooperate towards a mutual
benefit. The overall objective of this qualitative research is to explore how social
relationships, community networks, and trust contribute to income diversification
among rural households in the North Central Province of Sri Lanka In line with this
aim, the study seeks to understand how by examining how different forms of social
capital facilitate the initiation and expansion of income-generating activities by
providing access to resources, opportunities, and collaborative support. It further
examines how rural households rely on social capital as a coping mechanism during
periods of economic hardship or environmental crises, such as drought, crop failure,
or sudden income loss. The sample comprised 17 rural households in rural and semi
rural areas selected through purposive sampling from Anuradhapura District, Sri
Lanka. It collected relevant data from respondents via semi-structured face-to-face
interviews , lasting approximately 1.5 hours. Key dimensions identified through
thematic analysis, including themes and patterns relevant to determinants of Social
Capital and Income Diversification. In line with social capital theory, these
dimensions are further conceptualized through the distinction between bonding
social capital, bridging social capital, and linking social capital.The research
findings identify the influence of social relationships, community networks, and trust
on income diversification among rural households in the North Central Province of
Sri Lanka. Main themes include the role of social networks in income diversification;
the impact of collective support and informal mechanisms on risk-taking; knowledge
sharing and skill development for better livelihoods; social capital as a safety net in
crises; and the enhancement of market efficiency and economic decision-making
through social capital. Solid connections help people share, learn, and support each
other. Strong neighborhood ties facilitate information exchange and risk reduction,
although many groups remain insular. Rural development should foster connections
with external resources such as training centers and microfinance agencies, enabling
families to acquire new skills and opportunities beyond their immediate circles.
Organized community training and knowledge-sharing through groups can enhance
practical skills in food processing and climate-smart farming. There is a pressing
need for affordable financial options, as rural families often depend on informal
loans; thus, banks should offer accessible microcredit solutions. Additionally,
strengthening rural infrastructure and market facilities can enhance income
opportunities. Programs aimed at building resilience in climate-affected areas
should incorporate local support networks alongside formal resources to better
prepare communities for adverse conditions and disasters.
