nep-mfd New Economics Papers
on Microfinance
Issue of 2011‒12‒13
two papers chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

  1. Performance Management of Double Bottom Line Institutions: Evidence from Banco Compartamos’s Productivity Distribution By Marek Hudon; Anaïs Périlleux
  2. Informal Sector Dynamics In Times Of Fragile Growth: The Case Of Madagascar By Michael Grimm; Jann Lay; François Roubaud; Julia Vaillant

  1. By: Marek Hudon; Anaïs Périlleux
    Abstract: We use an innovative methodology to analyze social responsibility in double bottom line institutions such as microfinance institutions. We provide empirical evidence on the distribution of the generated surplus between the key stakeholders of one of the most famous MFIs worldwide: Banco Compartamos. Our results suggest that productivity gains generated by the institution have been primarily kept as gross self-financing margin for future investments or dividends for investors.
    Keywords: microfinance; governance; Compartamos; productivity
    JEL: O16 O50 G21
    Date: 2011–11
    URL: http://d.repec.org/n?u=RePEc:sol:wpaper:2013/104631&r=mfd
  2. By: Michael Grimm (Institute of Social Studies, The Hague, DIW and DIAL); Jann Lay (German Institute of Global and Area Studies,Hamburg); François Roubaud (DIAL, IRD, Paris); Julia Vaillant (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD)
    Abstract: (english) This paper investigates the dynamics of the informal sector in Madagascar during a period of fragile growth. Overall, the behavior of informal firms in terms of earnings, employment and capital accumulation points to a degree of heterogeneity which goes beyond a simple dualistic model and even a more refined model that would distinguish between an upper entrepreneurial and a lower subsistence tier within the informal sector. However, in line with the dualistic model, the informal sector indeed fulfils a labor absorbing function in times of crisis. During the growth period we see capital accumulation in most of the sectors and lots of evidence that households expand their activities. However, this happens mainly through the creation of new firms instead of the expansion of existing ones, which is consistent with much higher returns at very low levels of capital. More rapid expansion can be observed in sectors that operate with lower capital intensity, which is also consistent with risk or credit constraints as major deterrents to expansion. While there is some indication that total factor productivity increased over time, returns to capital and labor where not higher at the end of the observation period than at the beginning. Returns are also rather low at high levels of capital. These findings point to a limited growth potential of the informal sector as a whole. The heterogeneity in capital returns hints at large inefficiencies in allocating capital across informal firms. _________________________________ (français) Cet article examine la dynamique du secteur informel à Madagascar pendant une période de croissance fragile. Le comportement des firmes informelles en termes de revenus, d’emploi et d’accumulation du capital suggère un degré d’hétérogénéité allant au-delà du modèle dualiste classique, et même d’un modèle plus fin distinguant, au sein du secteur informel, un segment entrepreneurial et un segment de subsistance. Cependant, conformément au modèle dualiste, le secteur informel a absorbé le surplus de travail en temps de crise. Pendant la période de croissance, on constate une accumulation de capital dans la plupart des secteurs d’activité et une expansion des activités des ménages. Ceci se traduit pourtant principalement par la création de nouvelles firmes plutôt que par la croissance de firmes existantes, en lien avec des rendements beaucoup plus élevés à des faibles niveaux de capital. Une expansion plus rapide peut être observée dans les secteurs à faible intensité capitalistique, ce qui tend également à confirmer que le risque et les contraintes de crédit sont des obstacles à l’expansion. Alors que les résultats montrent que la productivité totale des facteurs a augmenté, les rendements du capital et du travail ne sont pas plus élevés à la fin de la période étudiée qu’au début. Les rendements sont également plutôt faibles à des niveaux élevés de capital. Ces résultats indiquent un potentiel de croissance globalement limité des firmes informelles. Enfin, l’hétérogénéité des rendements du capital plaide en faveur d’une allocation sous-optimale du capital dans le secteur informel.
    Keywords: Informal sector, microenterprise, firm growth, capital returns, Madagascar, Secteur informel, micro-entreprises, croissance des firmes, rendement du capital, Madagascar.
    JEL: O12 O17 L26 D22
    Date: 2011–09
    URL: http://d.repec.org/n?u=RePEc:dia:wpaper:dt201110&r=mfd

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