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on Microfinance |
| By: | Landmann, Andreas; Vollan, Björn; Frölich, Markus |
| Abstract: | This paper analyzes data from a novel field experiment designed to test the impact of two different insurance products and a secret saving device on solidarity in risk-sharing groups among rural villagers in the Philippines. Risk is simulated by a lottery, risk-sharing is possible in solidarity groups of three and insurance is introduced via less risky lotteries. Our main hypothesis is that formal market-based products lead to lower transfers among network members. We also test for the persistence of this crowding-out of solidarity. We find evidence for a reduction of solidarity by insurance if shocks are observable. Depending on insurance design, there is also evidence for persistence of this effect even if insurance is removed. Simulations using our regression results show that the benefits of insurance are completely offset by the reduction in transfers. However, if secret saving is possible solidarity is very low in general and there is no crowding out effect of insurance. This suggests that introducing formal insurance is not as effective as it is hoped for when the monetary situation can be closely monitored, but that it might be a very important complement when savings inhibit observing financial resources. -- |
| JEL: | C93 O12 Z13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:51&r=mfd |
| By: | Alessandro Tarozzi; Aprajit Mahajan; Brian Blackburn; Daniel Kopf; Lakshmi Krishnan; Joanne Yoong |
| Abstract: | Many severe health risks in developing countries could be substantially reduced with access to appropriate preventive measures. However, the associated costs are often high enough to restrict access among poor households, and free provision through public health campaigns is often not financially feasible. We describe findings from the first large-scale cluster randomized controlled trial in a developing country context that evaluates the uptake of a health-protecting technology, insecticide-treated bednets (ITNs), through micro-consumer loans, as compared to free distribution and control conditions. Numerous studies have shown that widespread, regular use of ITNs is one the most effective preventive measures against malaria. However, ownership rates remain very low in most malarious areas, including our study areas in rural Orissa (India). Despite the un-subsidized price, 52 percent of sample households purchased at least one ITN, leading to 16 percent of individuals using a treated net the previous night, relative to only 2 percent in control areas where nets were not offered for sale. However, the increase fell significantly short of the 47 percent previous-night usage rate achieved with free distribution. Most strikingly, we find that neither micro-loans nor free distribution led to improvements in malaria and anemia prevalence, measured using blood tests. We examine and rule out several plausible explanations for this latter finding. We conjecture that insufficient ITN coverage is the most likely explanation, and discuss implications for public health policy. |
| Keywords: | Malaria, Bednets, Microfinance, Public Health |
| JEL: | I1 I3 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:duk:dukeec:11-13&r=mfd |
| By: | Buehren, Niklas |
| Abstract: | Microfinance in general and microcredit programs in particular have attracted much attention among interest groups concerned with poverty eradication and are seen by many as highly promising means in order to alleviate poverty. More recently, the spotlight has turned increasingly on the development and promotion of microsaving devices and mechanisms suitable to the unbanked poor. Along these lines, the Saving Mobilization program implemented by BRAC in Uganda is an attempt to encourage a saving culture as well as overcoming barriers to make use of saving services at more formal financial institutions. Building on a randomized control trial, the aim of this study is to investigate the impact of this program on the saving behavior of participants. The intervention is successful in increasing the usage of semi-formal financial institutions on the extensive margin as well as to boost the amount held at these institutions. The total amount of savings, however, remains unaffected. Impact heterogeneity is important and the analysis shows that illiterate individuals as well as individuals having experienced theft in the recent past are more likely to respond to the program. -- |
| Keywords: | Microfinance,saving promotion,theft,literacy,Uganda |
| JEL: | D14 G21 O16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:16&r=mfd |
| By: | Cheung, Diana; Padieu, Ysaline |
| Abstract: | By reducing risk on income, health insurance may reduce household precautionary behaviours and boost consumption. This paper evaluates the impact of a subsidized public health insurance scheme designed for rural residents, the New Cooperative Medical Scheme (NCMS), on consumption and saving behaviours in rural China. To do so, we use socioeconomic and demographic data from the China Health and Nutrition Survey and implement OLS, IV and Propensity Score Matching. We find that NCMS helps lowering household savings by enhancing total consumption expenditures, in particular food consumption and bride expenses with OLS and IV estimations. However, when we implement a propensity score matching coupled with a difference-in-difference approach to control for time-invariant unobservables, these results no longer hold. Thus, the scheme does not have a disincentive effect on savings nor an incentive effect on consumption, suggesting that the implementation of the insurance is too recent in 2006 to be trusted by rural Chinese households, to reduce income risk and enable them to lower their precautionary savings. -- |
| Keywords: | Rural China,New Cooperative Medical Scheme,Saving,Consumption Propensity Score Matching,Difference-in-Difference |
| JEL: | C21 D1 I18 O53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:18&r=mfd |
| By: | Kemper, Niels; Klump, Rainer; Schumacher, Heiner |
| Abstract: | This article evaluates the impact of a land certification program on credit market outcomes in rural Vietnam. We hypothesize that the representation of property increases households' participation in formal credit markets. We compare credit market outcomes for certified and non-certified households controlling for socioeconomic and geographic characteristics, and use an instrumental variable approach exploiting a partial delay in program rollout. Certified households are more likely to borrow from formal banks with a collateral-based lending policy. There is no evidence for an effect on borrowing from formal sources without such a policy. Moreover, certified households pay lower interest rates on formal loans than non-certified households on formal and informal loans. -- |
| Keywords: | Credit,Land reform,Vietnam |
| JEL: | C2 O1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:45&r=mfd |
| By: | Heinz, Christa; Dinh, Thanh; Kleimeier, Stefanie |
| Abstract: | This paper analyses the determinants of collateral in loans granted to entrepreneurs and consumers. We use cross-sectional data on more than 39,000 bank loans raised by Vietnamese borrowers between 2006 and 2009. Our data set is unique because it contains information about the bank's assessment of the borrower's ex ante risk and the borrowers' wealth including pledged as well as unpledged assets. We find that observationally riskier borrowers, as measured by the bank through the ex ante risk score, are more likely to pledge collateral. At the same time, wealthier borrowers are more likely to pledge collateral in order to benefit from a reduction in their interest costs. We also present evidence on other determinants of collateral such as borrower-lender relationship, credit market competition, and institutions. -- |
| Keywords: | Collateral,retail lending,observed risk hypothesis,loan pricing,emerging markets |
| JEL: | G21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:36&r=mfd |
| By: | Ambrosius, Christian |
| Abstract: | In policy discussions, it has frequently been claimed that migrants' remittances could function as a 'catalyst' for financial access among receiving households. This paper provides empirical evidence on this hypothesis from Mexico, a main receiver of remittances worldwide. Using the Mexican Family Life Survey panel (MxFLS) for 2002 and 2005, the results from the treatment-effect-model at household level show that a change in remittance status has an important impact on ownership of savings accounts and the availability of borrowing options. This effect is significant for rural, but not for urban households and important for microfinance institutions, but not for traditional banks. -- |
| Keywords: | Remittances,Mexico,Financial Access,Microfinance |
| JEL: | G21 O16 F24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:5&r=mfd |
| By: | Finn Tarp; Thomas Markussen |
| Abstract: | This paper uses household panel data from rural Vietnam to explore the effects of having a relative in a position of political or bureaucratic power on farmers. agricultural investment decisions. Our main result is that households significantly increase their investment in land improvement as a result of relatives moving into public office. Connections to office holders appear to be important for investment because they strengthen de facto land property rights and improve access to off-farm employment and to informal loans. The findings underline the importance of informal networks for economic behaviour in environments with developing institutions and markets. They also suggest the presence of an untapped potential for economic development: if households without connections could obtain equally strong property rights and accessto credit and insurance as the well-connected households, investment levels would risesubstantially. |
| Keywords: | political connections, informal networks, land property rights, investment,credit, Vietnam |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2011-037&r=mfd |