nep-mfd New Economics Papers
on Microfinance
Issue of 2010‒03‒28
three papers chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

  1. Microfinance and Self-Help Finance System to Reduce Poverty from Pakistan: An It-Based Solution By Herani, Gobind M.
  2. Sensitivity of loan size to lending rates: Evidence from Ghana’s microfinance sector By Annim, Samuel Kobina
  3. Housing Policies in China: Issues and Options By Zenou, Yves

  1. By: Herani, Gobind M.
    Abstract: The aim of this paper is to find out the techniques and suggest computer-based solution to reduce poverty from Pakistan, and suggest sustainable management of micro-Finance and Self-help Finance systems. Literature review at national and international level reveals that many researchers have attempted to suggest microfinance as a tool to reduce poverty. Self-help financing blended with donor’s finance is also successfully being practiced. Model of Grameen Bank is also being replicated with some modification as per demand of the localities, as there is always a room for improvement with scientific and technological inventions. Computer technology, as it is already playing its role in various fields, can be fruitfully utilized for proper management of this proposed project. Presently NADRA e-Sahulat and Telenor’s easy paisa are programs that have capability to help the masses with maximum accuracy in the financial transactions. Some studies also encourage establishing a microfinance bank, with small deposits plus donor’s funds, to be electronically managed by NGOs and controlled by organizations of indigenous peoples in villages. This study concludes that by reducing manpower intermediate-expenditure and irregularities will reduce poverty and will help in saving the amount for maximizing their own welfare. Presently, facilities are already available with latest technology, which if modified and innovated will bear fruit. This study suggested that how national and international donor Agencies should get accurate real-time information relating dissemination of their funds in right-hands, with to increased efficiency and decreased management expenditure.
    Keywords: Microfinance; Self-Help Finance; NADRA e-Sahulat; Tameer Bank and Easypaisa
    JEL: J62 B21 M54 D85 G21 J23
    Date: 2010–03–10
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:21264&r=mfd
  2. By: Annim, Samuel Kobina
    Abstract: Recent evidence from the microfinance industry reveals increase in sources of funding which anecdotally links to the profits of institutions. This phenomenon has evoked concerns for the responsiveness of the poor to credit market operational policies such as loan pricing. This paper integrates the poor’s characteristics into a loan size equation to estimate influence on interest rate stimulus. Using data from Ghana, we test the hypothesis of loan price inelasticity using quantile regression and the interaction procedure. The quantile regression shows pronounced variations in responsiveness of loan size to interest rate changes at different percentiles. In contrast to an inverse relationship depicted between the 20th and 40th quantiles, we observe positive and fairly flat curvatures at the extremes and around the median. Motivated by this finding, the interaction procedure is employed for household poverty scores and lending rates at varied statistic to identify differences in clients’ responsiveness. The semi-elasticity of loan amount responsiveness to a unit change in interest rate is more than proportionate and significant for the poorest group. In a broader context, the need for market segmentation based on socio-economic well-being is suggested in the paper in pursuance of the ‘win-win’ objective of poverty reduction and financial sustainability.
    Keywords: Interest rate; sensitivity; loan; size; poor; microfinance; Ghana
    JEL: I30 G29 G20
    Date: 2009–11
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:21280&r=mfd
  3. By: Zenou, Yves (Research Institute of Industrial Economics (IFN))
    Abstract: This article consists in three parts. The first part deals with theory. We evaluate the pros and cons of government involvement in urban housing and of renting versus ownership. In the second part, we summarize the different housing policies that have been implemented in the United States, Europe, and Asia. We draw some conclusions. In particular, we show that there is a tradeoff between encouraging home ownership and social housing since countries that have favor the former have neglected the latter (like Japan, Spain, etc.). In the third part, we use the theory and the international policy parts to address housing policy issues in China. One of the main concerns in Chinese cities is the raise of poverty mainly by “illegal” migrants (who are Chinese rural residents) living in “urban villages”. We propose two steps to fight against poverty in Chinese cities. The first one is to require that the Chinese government recognizes these “illegal” migrants by helping them becoming “legal”. The second step is to encourage social housing that directly or indirectly subsidizes housing for the poor. In that case, to fight against poverty, one can either implement place-targeted policies (like the enterprise zone programs in the US and Europe and/or housing projects in the US, UK, or France) or people-targeted policies (like the MTO programs in the US). We also discuss other issues related to poverty. In particular, we suggest that the government could also try to keep migrants in rural areas by attracting firms there and/or introduce a microfinance system that helps them become entrepreneur.
    Keywords: Urban villages; Social housing; Poverty; Place-targeted policies; People-targeted policies; China
    JEL: H50 O53
    Date: 2010–03–01
    URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:0824&r=mfd

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