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on Microfinance |
| By: | Craig McIntosh (University of California, San Diego); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley) |
| Abstract: | This paper uses data from Uganda's largest incumbent microfinance institution to analyze the impact of entry by competing lenders on client behavior. We first examine the geographic placement decisions of competitors, and find that placement decisions are strongly affected by district-level characteristics. We observe that increased competition induces a decline in repayment performance and in savings deposited with the incumbent Village Bank, suggesting multiple loan-taking by clients. Urban clients take multiple loans primarily from lenders with more individual methodologies, while rural clients borrow from several group lenders. Individuals who operate larger businesses are the ones most likely to leave the incumbent Village Bank when a Solidarity Group lender enters the marketplace. |
| Keywords: | microfinance, competition, credit markets, |
| Date: | 2003–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:987&r=mfd |
| By: | Cecile Aubert (Universite Paris Dauphine); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley) |
| Abstract: | Microfinance institutions (MFIs) have introduced incentive pay schemes for their credit agents to induce information acquisition on borrowers. Bonuses linked to repayment are efficient for profit-oriented MFIs but insufficient for non-profit MFIs trying to reach very poor borrowers, when repayment and wealth are positively correlated. We show that no incentive scheme is consistent with this (non-verifiable) objective: Random audits on the share of very poor borrowers selected by the agent become necessary. Under the optimal contract, non-profit MFIs generally maximize the number of poor borrowers it services by cross-subsidization between very poor and less poor borrowers. |
| Keywords: | micro-credit, pro-poor objectives, incentives, |
| Date: | 2004–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:988&r=mfd |
| By: | Sharma, Manohar P. |
| Abstract: | "This case study examines the scaling-up experiences of two microfinance institutions: the Nirdhan Utthan Bank Limited (NUBL) in Nepal and the Self-Help Group (SHG)-Bank linkage program of the National Agricultural Bank for Agriculture and Rural Development (NABARD) in India. Both NUBL and NABARD groups use self-regulation (peer selection, peer monitoring, and peer enforcement of contracts) as key to gaining access to services not otherwise available to them.... The NABARD experience is government-led. NUBL, on the other hand, was established as an alternative to government action. In both cases, government policy in the form of mandatory "priority sector" credit played and continues to play a critical role in facilitating expansion. The subsidy content (explicit and implicit) of both NUBL and the NABARD program is quite high, and continued expansion of both programs is highly conditional on whether the policy regime of directed credit continues. Any change in this policy will deal a severe blow to both of these institutions." from Authors' Abstract |
| Keywords: | Microfinance ,Community participation ,Scaling up , |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:fcndbr:178&r=mfd |
| By: | Garrett, James |
| Abstract: | "CARE began PROSPECT (Program of Support for Poverty Elimination and Community Transformation) in 1998. PROSPECT aims to reduce poverty in peri-urban areas of Lusaka. It employs a community-based approach to carry out three types of activities: social empowerment (institution building at the local level), personal empowerment (microfinance), and infrastructure improvement (mostly water supply schemes). PROSPECT has attempted to carry out these activities largely through its support of area-based organizations (ABOs) that now form part of city government. The zone development committees (ZDCs) and residents' development committees (RDCs) are the basic components of the ABO structure. These are community-level representations of municipal government; they are the community's mechanisms for expressing its voice and driving development. PROSPECT is itself an extension of an earlier project, PUSH II (Peri-Urban Self-Help Project). PUSH II and PROSPECT are fundamentally about developing community-based and community-driven development (CDD) mechanisms and strengthening community capacities to identify and respond to community needs. The paper examines the scaling-up experience of PUSH II and PROSPECT, looking especially at the mechanisms of CDD, the ABOs." Authors' Abstract |
| Keywords: | CARE ,Poverty alleviation ,Community organizations ,Urban poor ,Peri-urban areas , |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:fcndbr:177&r=mfd |