New Economics Papers
on Microfinance
Issue of 2008‒07‒20
three papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Equitable Access to Financial Services: Is Microfinancing Sufficient? By Degol Hailu
  2. La introducción de la microfinanciación islámica en África: el caso nigeriano By Hasan, Zubair
  3. Fixing Market Failures or Fixing Elections? Agricultural Credit in India By Shawn A. Cole

  1. By: Degol Hailu (UNDP SURF)
    Abstract: Access to the financial sector has numerous benefits. Savers and investors are matched, transactions costs are lowered and liquidity is created. But less than half of the households in developing countries have access to financial services, compared to over 70 per cent in the developed world. By 2006, even in relatively successful countries such as Ghana and Tanzania, only about 6 per cent of the population had access to banking services. In Benin, there were only 35 bank branches serving a population of 7 million. Will microlending increase access to financial services? (...)
    Keywords: Equitable Access to Financial Services: Is Microfinancing Sufficient?
    Date: 2008–07
  2. By: Hasan, Zubair
    Abstract: This paper finds that the current arrangements for providing financial support to small enterprises are both insufficient and inefficient in Nigeria. It pleads for the introduction of Islamic micro financing in the country for a variety of favourable conditions that already exist there, especially the majority of population being the followers of Islam that shuns interest in all forms from economic activity to promote growth equity and stability.
    Keywords: Nigeria; microfinance
    JEL: G10
    Date: 2008–07–01
  3. By: Shawn A. Cole (Harvard Business School, Finance Unit)
    Abstract: This paper integrates theories of political budget cycles with theories of tactical electoral redistribution to test for political capture in a novel way. Studying banks in India, I find that government-owned bank lending tracks the electoral cycle, with agricultural credit increasing by 5-10 percentage points in an election year. There is significant cross-sectional targeting, with large increases in districts in which the election is particularly close. This targeting does not occur in non-election years, or in private bank lending. I show capture is costly: elections affect loan repayment, and election year credit booms do not measurably affect agricultural output.
    Date: 2008–07

This issue is ©2008 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.