nep-mfd New Economics Papers
on Microfinance
Issue of 2011‒01‒30
three papers chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

  1. From boom to bust: how different has microfinance been from traditional banking? By Wagner, Charlotte
  2. Does credit improve the food consumption vulnerability of the extreme poor? - Empirical evidence from Bangladesh By Hasan, Mohammad Monirul
  3. Access to financial services and the financial inclusion agenda around the world : a cross-country analysis with a new data set By Ardic, Oya Pinar; Heimann, Maximilien; Mylenko, Nataliya

  1. By: Wagner, Charlotte
    Abstract: This paper presents an in-depth analysis of developments in the microfinance sector before and after the Lehman Brothers collapse in 2008 by comparing them with developments in traditional banking sectors of emerging market economies and developing countries. The findings indicate that microfinance has been part of the same credit boom observed in the traditional banking sector. Moreover, as in the traditional banking sector, the boom was fostered by substantial inflows of foreign capital. This raises the question whether the crisis resilience the microfinance sector has shown in the past remains a characterizing feature of microfinance or whether the same risk factors associated with excessive credit growth lead - as in the traditional banking sector - to greater vulnerability. The findings indicate that microfinance markets with strong capital inflows, high credit growth rates and rapidly increasing competition experienced a substantial decrease in credit growth and deterioration of portfolio quality in the post-Lehman period. This is in line with the evidence found for the traditional banking sector in emerging markets and developing countries. The paper concludes that by becoming part of the global financial system, microfinance has lost one of the characteristics which distinguish it from traditional banking, namely its higher resilience towards crises in domestic and global financial markets. --
    Keywords: microfinance,crisis resilience,credit boom,financial crisis
    JEL: E44 G21
    Date: 2010
  2. By: Hasan, Mohammad Monirul
    Abstract: This paper examines the extent of seasonal hunger and its food consumption vulnerability among rural households in the North West part of Bangladesh (i.e., the greater Rangpur region) and whether the Programmed Initiative for Monga Eradication or PRIME interventions (such as flexible micro-credit, Emergency loan and cash for work) have some positive impact for improving the consumption ordering of monga affected households or not. Seasonal hunger, also known as monga in greater Rangpur, is caused by a deprivation of food during certain months of the year when households do not have adequate employment, income, and savings. That is, monga is an ex post measure of seasonal deprivation of food. However, for policymaking purpose, knowing who are going to be in seasonal hunger in future is more important than knowing who already are. This ex post measure of seasonal food deprivation through the changes in consumption ordering in two years- 2008 and 2007 can be defined as food consumption vulnerability. That is, vulnerability to seasonal hunger is the likelihood of remaining in or falling into seasonal hunger. Households smooth consumption via income smoothing and other measures, which also reduce their vulnerability to monga. When consumption smoothing does not happen for one reason or another, food deprivation is sure to follow.
    Keywords: Poverty; Microfinance; Impact Analysis; Food Consumption Vulnerability;
    JEL: I31 C23 O22 R51 R2 C33 I32
    Date: 2010–09
  3. By: Ardic, Oya Pinar; Heimann, Maximilien; Mylenko, Nataliya
    Abstract: Recent empirical evidence highlights that access to basic financial services can make a substantial positive difference in improving poor people's lives. Accordingly, financial sector reforms that promote financial inclusion are increasingly at the core of policymakers’ agendas. The Consultative Group to Assist the Poor and the World Bank Group, in response, launched the Financial Access project, including a cross-country database on financial inclusion topics and an annual report to inform the policy debate. Using this database, this paper (i) counts the number of unbanked adults around the world at 56 percent, (ii) analyzes the state of access to deposit and loan services as well as the extent of retail networks, and (iii) discusses the state of financial inclusion mandates around the world.
    Keywords: Access to Finance,Financial Literacy,Banks&Banking Reform,Debt Markets,Emerging Markets
    Date: 2011–01–01

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