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on Microfinance |
| By: | Feigenberg, Benjamin (MIT); Field, Erica M. (Harvard University); Pande, Rohini (Harvard University) |
| Abstract: | A number of development assistance programs promote community interaction as a means of building social capital. Yet, despite strong theoretical underpinnings, the role of repeat interactions in sustaining cooperation has proven difficult to identify empirically. We provide the first experimental evidence on the economic returns to social interaction in the context of microfinance. Random variation in the frequency of mandatory meetings across first-time borrower groups generates exogenous and persistent changes in clients' social ties. We show that the resulting increases in social interaction among clients more than a year later are associated with improvements in informal risk-sharing and reductions in default. A second field experiment among a subset of clients provides direct evidence that more frequent interaction increases economic cooperation among clients. Our results indicate that group lending is successful in achieving low rates of default without collateral not only because it harnesses existing social capital, as has been emphasized in the literature, but also because it builds new social capital among participants. |
| JEL: | C81 C93 O12 O16 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp10-019&r=mfd |
| By: | Sagamba, Moïse (Université Lumiére de Bujumbura and Université de Bretagne Occidentale); Shchetinin, Oleg (Department of Economics, School of Business, Economics and Law, Göteborg University); Yusupov, Nurmukhammad (Chaire Banque Populaire, Audencia Nantes School of Management) |
| Abstract: | The mission of microfinance is generally perceived as compensation for the failure of the mainstream financial institutions to deliver access to finance to the poor. Microloan officers have significant influence on microloans allocation as they contact loan applicants and process information inside microfinance institutions (MFIs). We conduct a choice experiment with microloan officers in Burundi to determine which clients are preferred for microloan allocation and whether the less advantaged are indeed targeted. The results suggest that the allocation of microloans is slightly in favor of the less advantaged, whereas the main determinant is the quality of the applicants' business projects. Somewhat surprisingly, we find only small differences in the determinants of the targeted groups between non-profit and profit-seeking MFIs.<p> |
| Keywords: | microfinance; choice experiment; microloan officers; non-profit organizations |
| JEL: | C93 G21 L31 O55 |
| Date: | 2011–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0492&r=mfd |
| By: | Aterido, Reyes; Beck, Thorsten; Iacovone, Leonardo |
| Abstract: | This paper assesses whether there is a gender gap in the use of financial services by businesses and individuals in Sub-Saharan Africa. The authors do not find evidence of gender discrimination or lower inherent demand for financial services by enterprises with female ownership participation or by female individuals when key characteristics of the enterprises or individuals are taken into account. In the case of enterprises, they explain this finding with selection bias -- females are less likely to run sole proprietorships than men, and firms with female ownership participation are smaller, but more likely to innovate. In the case of individuals, the lower use of formal financial services by women can be explained by gender gaps in other dimensions related to the use of financial services, such as their lower level of income and education, and by their household and employment status. |
| Keywords: | Access to Finance,Banks&Banking Reform,Emerging Markets,Housing&Human Habitats,Gender and Law |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5571&r=mfd |