New Economics Papers
on Microfinance
Issue of 2007‒09‒02
three papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Group lending and the role of the group leader:Theory and evidence from Eritrea By Eijkel, Remco van; Hermes, Niels; Lensink, Robert
  2. The Credit is a Right By Reggiani, Tommaso
  3. Microfinance et réduction de la pauvreté en Afrique Subsaharienne : Quels résultats au Mali ? By Yaya Koloma

  1. By: Eijkel, Remco van; Hermes, Niels; Lensink, Robert (Groningen University)
    Abstract: Abstract: This paper investigates the strategic monitoring behaviour within a group lending setting. We develop a theoretical model, showing that monitoring efforts of group members differ from each other in equilibrium, as a result of the asymmetry between these members in terms of the future profits they generate with their project. In particular, we show that the entrepreneur with the project that generates the highest future profits also puts in the highest monitoring effort. Moreover, monitoring efforts differ between group members due to free-riding: one member reduces her level of monitoring if the other increases her monitoring effort. This effect is also at play when we introduce a group leader in the model. The individual who becomes the group leader will supply more monitoring effort than in the benchmark case, because of the reduced per unit monitoring costs related to becoming the leader. We empirically test the model using data from a survey of microfinance in Eritrea and show that the group leader attaches more weight to future periods than non-leaders in group lending and that this may explain why a large part of total monitoring is put in by the leader.
    Date: 2007
  2. By: Reggiani, Tommaso
    Abstract: This article proposes to analyze Grameen Bank operational system and its own evolution, illustrating the values that support this economics theory and the innovations that microcredit brings to the understanding of economics and banking phenomena.
    Keywords: Microcredit; Grameen Bank; Poverty; Yunus; Ethics in Economics
    JEL: R51 G21
    Date: 2007–06–01
  3. By: Yaya Koloma (GED, Université Montesquieu Bordeaux IV)
    Abstract: Ce papier a pour but de décrire les faits marquants du secteur de la microfinance au Mali : son contexte, ses caractéristiques, et son articulation avec les politiques publiques de réduction de la pauvreté et des inégalités, notamment de genre. Les nouvelles orientations du financement du développement ont conduit le Mali à considérer le secteur de la microfinance comme l’un des outils majeurs des politiques publiques de lutte contre la pauvreté, en instaurant un cadre réglementaire et une politique nationale de microfinance. Elle toucherait 6,5% de la population totale estimée à 11,6 millions en 2005. Ce taux aurait connu un accroissement de 27,7% entre 2003 et 2005. Sur 1,9 millions de familles maliennes en 2005, la proportion de familles touchées par les services microfinanciers s’élèverait à 38,8%. Les femmes représenteraient 40,3% de la clientèle des institutions de microfinance. Les controverses théoriques et empiriques ont conduit à revoir l’espoir tant suscité de l’efficacité des services de la microfinance en termes de lutte contre la pauvreté et les inégalités de genre. L’étude du cas du Mali, à travers les quelques rares évaluations d’impact qui ont été réalisées, permet de constater que, même si une amélioration certaine des conditions de vie de certains clients ou clientes bénéficiaires des services n’est pas à écarter, une réduction certaine de la pauvreté peut paraître difficile. The purpose of this paper is to describe the outstanding facts of the microfinance’s sector in Mali, its context, its characteristics, and its articulation with the public policies of poverty reduction, and in particular the gender inequalities. The new directions of financial development led Mali to consider the microfinance sector as one of the major tools of the public policies to fight against poverty, and also found a coherent lawful framework and a national microfinance policy. The microfinance (credit and/or saving) touched 6.5% of a global population estimated to 11.6 millions persons in 2005. This rate increased by 27.7% from 2003 to 2005, 1.9 million Malians families in 2005, the proportion of family accessing to the microfinance services would be 38.8%. Women would represent 40.3% and they seem to be the privilege target group of microfinance. The theoretical and empirical controversies should permit to re-examine the so high hope raised by microfinance concerning its effectiveness to reduce poverty and gender inequalities. Through the few evaluations of impact, the Mali’s case study, made it possible to note that even if an incontestable improvement of living conditions of some beneficiaries is not to draw aside, a real reduction of poverty could appears difficult. (Full text in french)
    JEL: G21 G39
    Date: 2007–08

This issue is ©2007 by Aastha Pudasainee and Olivier Dagnelie. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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