|
on Microfinance |
| By: | Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester, UK & Research Institute for Economics and Business Administration, Kobe University, Japan); Raghav Gaiha (Faculty of Management Studies, University of Delhi, India); Ganesh Thapa (International Fund for Agricultural Development, Italy); Samuel Kobina Annim (Economics, School of Social Sciences, University of Manchester, UK); Aditi Gupta (Yes Bank, mumbai) |
| Abstract: | Under the continued effects of global financial crisis where the donor’s investment in microfinance sectors has become shrunk, how the macroeconomic factors or the crisis or the macro-institutional factors would affect the performance of microfinance institutions (MFIs) have become one of the key debates among the policy makers and practitioners. The present paper has investigated the effect of both institutional factors and the macro economy on the financial performance of MFIs drawing upon the Microfinance Information Exchange (MIX) data as well as cross-country data of macro economy, finance and institutions drawing upon three stage least squares (3SLS) and fixed effects vector decomposition (FEVD) to take account of the endogeneity of key explanatory variables. In contrast to Ahlin et al.’s (2010), we generally find that institutional factors affect MFIs' financial performance, in particular, profitability, operating expense, and portfolio quality. It is also found that the macro-economic and financial factors, such as GDP and share of domestic credit to GDP, have positive impacts on MFIs’ financial performance, such as profitability, operating expense ratio and portfolio quality. It is thus concluded that while macroeconomic factors are important, improving macro-institutional factors, policies to raise country-level institutional qualities are required for making the activities of MFIs more sustainable under the global recession. |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-22&r=mfd |
| By: | Fafchamps, Marcel; McKenzie, David J.; Quinn, Simon; Woodruff, Christopher |
| Abstract: | Standard models of investment predict that credit-constrained firms should grow rapidly when given additional capital, and that how this capital is provided should not affect decisions to invest in the business or consume the capital. We randomly gave cash and in-kind grants to male- and female-owned microenterprises in urban Ghana. Our findings cast doubt on the ability of capital alone to stimulate the growth of female microenterprises. First, while the average treatment effects of the in-kind grants are large and positive for both males and females, the gain in profits is almost zero for women with initial profits below the median, suggesting that capital alone is not enough to grow subsistence enterprises owned by women. Second, for women we strongly reject equality of the cash and in-kind grants; only in-kind grants lead to growth in business profits. The results for men also suggest a lower impact of cash, but differences between cash and in-kind grants are less robust. The difference in the effects of cash and in-kind grants is associated more with a lack of self-control than with external pressure. As a result, the manner in which funding is provided affects microenterprise growth. |
| Keywords: | Microenterprises; Ghana; Conditionality; Asset Integration |
| JEL: | C93 O12 O16 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8466&r=mfd |
| By: | Fafchamps, Marcel; La Ferrara, Eliana |
| Abstract: | This paper examines the incomes of individuals who have joined self-help groups in poor neighborhoods of Nairobi. Self-help groups are often advocated as a way of facilitating income pooling. We find that incomes are indeed more correlated among individuals in the same group than among individuals who belong to different groups. Using an original methodology, we test whether this correlation is due to self-selection of similar individuals into the same groups. We find that this correlation is not driven by positive assortative matching. If anything, selection works in the opposite direction: incomes from group activities would be more correlated if individuals were matched at random. These findings are consistent with the idea that self-help groups play a mutual assistance role. |
| Keywords: | income pooling; self-help groups |
| JEL: | O12 O17 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8452&r=mfd |
| By: | Jaco Zuijderduijn; Tine De Moor; Jan Luiten van Zanden (Utrecht University) |
| Abstract: | In this paper we analyse the functioning of private capital markets in Holland in the late medieval period. We argue that in the absence of banks and state agencies involved with the supply of credit, entrepreneurs access to credit was determined by two interrelated factors. The first was the quality of property rights protection and the extent to which property could be used as collateral. The second was the level of interest in borrowing money at the time, as well as such borrowing compared with the interest rates on risk-free investments. For our case study, the small town of Edam, and its hinterland, De Zeevang, in the fifteenth and sixteenthcentury, we demonstrate that properties were used as collateral on a large scale, and that interest rates on both small and large loans were relatively low (about six per cent). As a result, many households (whether headed by men or women) owned financial assets and/or debts, and the degree of financial sophistication was relatively high. |
| Keywords: | credit markets, Holland, late Middle Ages, NIE, micro-credit |
| URL: | http://d.repec.org/n?u=RePEc:ucg:wpaper:0011&r=mfd |