SOCIAL CAPITAL AND HOUSEHOLD INCOME DIVERSIFICATION IN RURAL SRI LANKA: A QUALITATIVE EXPLORATION OF SOCIAL RELATIONS, TRUST, COMMUNITY NETWORKS, AND LIVELIHOOD STRATEGIES

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.