nep-mfd New Economics Papers
on Microfinance
Issue of 2010‒04‒11
three papers chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

  1. Microfinance in Uzbekistan : market overview and impact assessment needs By Nargiza Maksudova
  2. Assessing the Role of Microfinance in Fostering Adaptation to Climate Change By Shardul Agrawala; Maëlis Carraro
  3. Measuring financial access around the world By Kendall, Jake; Mylenko, Nataliya; Ponce, Alejandro

  1. By: Nargiza Maksudova (CERGE-EI)
    Abstract: Microfinance has a strong footing in Uzbekistan, the most populous country in the Central Asian region with a large fraction of inhabitants living in rural areas. Considered one of the key means of alleviating poverty and generating employment, the Uzbek government gave priority to microfinance initiatives, which resulted in the adoption of several microfinance laws. This paper provides an overview of the microfinance market as it has evolved in Uzbekistan, and calls for more comprehensive types of impact evaluation surveys that could benefit further market development.
    Date: 2009–03
  2. By: Shardul Agrawala; Maëlis Carraro
    Abstract: Much of the current policy debate on adaptation to climate change has focussed on estimation of adaptation costs, ways to raise and to scale-up funding for adaptation, and the design of the international institutional architecture for adaptation financing. There is however little or no emphasis so far on actual delivery mechanisms to channel these resources at the sub-national level, particularly to target the poor who are also often the most vulnerable to the impacts of climate change. It is in this context that microfinance merits a closer look. This paper offers the first empirical assessment of the linkages between microfinance supported activities and adaptation to climate change. Specifically, the lending portfolios of the 22 leading microfinance institutions in two climate vulnerable countries – Bangladesh and Nepal - are analysed to assess the synergies and potential conflicts between microfinance and adaptation. The two countries had also been previously examined as part of an earlier OECD report on the links between macro-level Official Development Assistance and adaptation. This analysis provides a complementary “bottom-up” perspective on financing for adaptation. Insights from this analysis also have implications for OECD countries. This is because microfinance is also being increasingly tapped to reduce the vulnerability of the poor in domestic OECD contexts as well and may therefore have the potential to contribute to adaptation. The paper identifies areas of opportunity where microfinance could be harnessed to play a greater role in fostering adaptation, as well as its limitations in this context. It also explores the linkage between the top-down macro-financing for adaptation through international financial mechanisms and the bottom-up activities that can be implemented through microfinance.<BR>Une bonne partie du débat sur l’adaptation s’est concentrée sur l’estimation des coûts de l’adaptation, sur les moyens de mobiliser et d’intensifier les ressources financières nécessaires, et sur la conception d’une architecture institutionnelle internationale pour le financement de l’adaptation. Or, les mécanismes existants d’acheminement de ces ressources au niveau infranational, en particulier ceux ciblant les populations démunies qui sont souvent les plus vulnérables aux impacts du changement climatique, n’ont jusqu’à présent guère retenu l’attention. C’est dans ce contexte que la microfinance mérite d’être examinée de plus près. Le présent rapport offre la première évaluation empirique des liens entre les activités soutenues par la microfinance et l’adaptation au changement climatique. Il comporte une analyse des portefeuilles des 22 institutions principales de microfinance dans deux pays vulnérables au changement climatique – le Bangladesh et le Népal – qui doit permettre d’évaluer les synergies et les conflits éventuels entre la microfinance et l’adaptation. Ces deux pays ont déjà fait l’objet d’un examen préalable dans le cadre d’un autre rapport de l’OCDE sur les liens entre l’aide publique au développement au niveau macro-économique et l’adaptation. La présente analyse aborde le financement de l’adaptation selon une perspective « ascendante » complémentaire. Les pays de l’OCDE peuvent également bénéficier des éclaircissements apportés par cette analyse. En effet, la microfinance est également de plus en plus utilisée pour réduire la vulnérabilité des populations démunies dans le contexte national des pays de l’OCDE et pourrait donc être exploiter pour promouvoir l’adaptation. Ce rapport identifie également les domaines dans lesquels la microfinance pourrait être mise à profit pour jouer un rôle plus important dans l’adaptation, ainsi que les limites de ce mode de financement dans ce contexte. Enfin, il examine le lien entre l’approche « descendante » du macrofinancement de l’adaptation au moyen d’instruments financiers internationaux, et les activités ascendantes mises en oeuvre par le biais de la microfinance.
    JEL: Q54 Q56 R51
    Date: 2010–02–12
  3. By: Kendall, Jake; Mylenko, Nataliya; Ponce, Alejandro
    Abstract: This paper introduces a new set of financial access indicators for 139 countries across the globe and describes the results of a preliminary analysis of this data set. The new data set builds on previous work using a similar methodology. The new data set features broader country coverage and greater disaggregation by type of financial product and by type of institution supplying the product -- commercial banks, specialized state run savings and development banks, banks with mutual ownership structure (such as cooperatives), and microfinance institutions. The authors use the data set to conduct a rough estimation of the number of bank accounts in the world (6.2 billion) as well as the number of banked and unbanked individuals. In developed countries, they estimate 3.2 accounts per adult and 81 percent of adults banked. By contrast, in developing countries, they estimate only 0.9 accounts per adult and 28 percent banked. In regression analysis, they find that measures of development and physical infrastructure are positively associated with the indicators of deposit account, loan, and branch penetration.
    Keywords: Access to Finance,Banks&Banking Reform,Debt Markets,Emerging Markets,E-Business
    Date: 2010–03–01

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