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on Microfinance |
| By: | Hermes, Niels; Lensink, Robert; Meesters, Aljar (Groningen University) |
| Abstract: | This paper uses stochastic frontier analysis (SFA) to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). Using a sample of more than 1,300 observations, our study suggests that outreach and efficiency of MFIs are indeed negatively correlated. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:08002&r=mfd |
| By: | Nava Ashraf (Harvard Business School and Jameel Poverty Action Lab); Xavier Giné (The World Bank); Dean Karlan (Economic Growth Center, Yale University) |
| Abstract: | In much of the developing world, many farmers grow crops for local or personal consumption despite export options which appear to be more profitable. Thus many conjecture that one or several markets are missing. We report here on a randomized controlled trial conducted by DrumNet in Kenya that attempts to help farmers adopt and market export crops. DrumNet provides smallholder farmers with information about how to switch to export crops, makes in-kind loans for the purchase of the agricultural inputs, and provides marketing services by facilitating the transaction with exporters. The experimental evaluation design randomly assigns pre-existing farmer self-help groups to one of three groups: (1) a treatment group that receives all DrumNet services, (2) a treatment group that receives all DrumNet services except credit, or (3) a control group. After one year, DrumNet services led to an increase in production of export oriented crops and lower marketing costs; this translated into household income gains for new adopters. However, one year after the study ended, the exporter refused to continue buying the cash crops from the farmers because the conditions of the farms did not satisfy European export requirements. DrumNet collapsed in this region as farmers were forced to sell to middlemen and defaulted on their loans. The risk of such events may explain, at least partly, why many seemingly more profitable export crops are not adopted. |
| Keywords: | Field Experiment, Export Crop, Food Safety Standards |
| JEL: | O12 Q17 F13 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:967&r=mfd |
| By: | Chen Xiang Liu |
| Abstract: | China’s current financial structure does not give sufficient support to rural areas, leaving many farmers and rural businesses without the capital they need to develop. Rural finance is the weakest point in the country’s entire financial system. Low profits for rural financial institutions, a lack of rural financial products and services and the difficulty many farmers experience in securing loans are the main problems plaguing the rural financial system. Accelerating rural financial reform and making it easier for rural people to access capital are key parts of the country’s effort to reform its overall financial system, to resolve “Three Rural Issues (San Nong)(1)” (Agriculture, Countryside, Farmers), and to create “new socialist countryside”. The main objectives of this paper are to (i) examine the current status of rural finance’s demand and supply and identify existing issues and constraints; (ii) evaluate ongoing rural financial reform and explore suitable roadmaps to develop a well-functioning and sustainable rural finance system, which would address the diverse needs of “new socialist countryside” construction. (1) San nong literally means three “nong”. The word “nong” in Chinese is combined with other words to form phrases such as nongye (agriculture), nongcun (villages or countryside), and nongmin (farmers or peasants). |
| Keywords: | banks, microcredit institutions, agricultural insurance, informal finance |
| JEL: | G21 G22 Q14 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2008-43&r=mfd |
| By: | Jonathan Zinman |
| Abstract: | Many policymakers and some behavioral models hold that restricting access to expensive credit helps consumers by preventing overborrowing. The author examines some short-run effects of restricting access, using household panel survey data on payday loan users collected around the imposition of binding restrictions on payday loan terms in Oregon. The results suggest that borrowing fell in Oregon relative to Washington, with former payday loan users shifting partially into plausibly inferior substitutes. Additional evidence suggests that restricting access caused deterioration in the overall financial condition of the Oregon households. The results suggest that restricting access to expensive credit harms consumers on average. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:08-32&r=mfd |