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on Microfinance |
| By: | Gine, Xavier; Goldberg, Jessica; Yang, Dean |
| Abstract: | How do borrowers respond to improvements in a lender's ability to punish defaulters? This paper reports the results of a randomized field experiment in rural Malawi that examines the impact of fingerprinting borrowers in a context where a unique identification system is absent. Fingerprinting allows the lender to more effectively use dynamic repayment incentives: withholding future loans from past defaulters while rewarding good borrowers with better loan terms. Consistent with a simple model of borrower heterogeneity and information asymmetries, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest of the borrowers. The change in repayment rates is driven by reductions in adverse selection (smaller loan sizes) and lower moral hazard (for example, less diversion of loan-financed fertilizer from its intended use on the cash crop). |
| Keywords: | Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Microfinance,Economic Theory&Research |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5438&r=mfd |
| By: | Katsushi Imai; Md. Shafiul Azam |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:1019&r=mfd |
| By: | Beck, Thorsten; Cull, Robert; Fuchs, Michael; Getenga, Jared; Gatere, Peter; Randa, John; Trandafir, Mircea |
| Abstract: | Although Kenya's financial system is by far the largest and most developed in East Africa and its stability has improved significantly over the past years, many challenges remain. This paper assesses the stability, efficiency, and outreach of Kenya's banking system, usingaggregate, bank-level, and survey data. Banks'asset quality and liquidity positions have improved, making the system more resistant to shocks, and interest rate spreads have declined, in part due to reduction in the overhead costs of foreign banks. Outreach remains limited, but has improved in recent years, driven by mobile payments services in the domestic remittance market. Fostering a level regulatory playing field for all deposit-taking institutions is a key remaining challenge. Specifically, an effective but not overly burdensome framework for regulation and supervision of microfinance institutions and cooperatives is a priority. Maintaining an openness to new, and non-bank, providers of financial services, which has enabled the success of mobile payments, could also further outreach. |
| Keywords: | Banks&Banking Reform,Access to Finance,Debt Markets,Emerging Markets,Bankruptcy and Resolution of Financial Distress |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5442&r=mfd |
| By: | Yuyu Chen; Ginger Zhe Jin |
| Abstract: | Many governments advocate nationwide health insurance coverage but the effects of such a program are less known in developing countries. We use part of the 2006 China Agricultural Census (CAC) to examine whether the recent health insurance coverage in rural China has affected children mortality, pregnancy mortality, and the school enrollment of the 6-16 year old. Our data represent a census of 5.9 million people living in eight low-income rural counties, four of which have adopted the New Cooperative Medical System (NCMS) by 2006 and the other four did not adopt NCMS until 2007. In the counties that offer NCMS, a household may take or not take the insurance. A first look of the data suggests that enrolling in NCMS is associated with better school enrollment and lower mortality of young children and pregnant women. However, using a difference-in-difference propensity score method, we find most of these differences are driven by the endogenous introduction and take up of NCMS, and classical propensity score matching fails to address the selection bias. While NCMS does not show beneficial impacts on the average population, we find some evidence that NCMS helps improve the school enrollment of six-year-olds. |
| JEL: | I18 I21 I38 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16417&r=mfd |