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on Microfinance |
| By: | Gine, Xavier; Mansuri, Ghazala; Picon, Mario |
| Abstract: | Female entrepreneurship is low in many developing economies partly because of constraints on women's time and mobility, which are often reinforced by social norms. This paper analyzes a marketing experiment designed to encourage women to adopt a new microcredit product. A brochure with the same content but two different covers was randomly distributed among male and female borrowing groups. One cover featured five businesses run by men, while the other showed identical businesses run by women. Men and women responded to psychological cues. Among men who were not business owners, had lower measured ability and whose wives were less educated, the responses to the female brochure were more negative, as did female business owners with low autonomy within the household. Women with relatively high levels of autonomy had a similar negative response to the male brochure, while there was no effect on female business owners with autonomy. Overall, these results suggest that women's response to psychological cues, such as positive role models, may be affected by their level of autonomy at home, and more intensive interventions may be required for more disadvantaged women. |
| Keywords: | Access to Finance,Debt Markets,Business in Development,Competitiveness and Competition Policy,Banks&Banking Reform |
| Date: | 2012–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6020&r=mfd |
| By: | Karlan, Dean (Yale University); Morten, Melanie (Yale University); Zinman, Jonathan (Dartmouth College) |
| Abstract: | We worked with two microlenders to test impacts of randomly assigned reminders for loan repayments in the "text messaging capital of the world". We do not find strong evidence that loss versus gain framing or messaging timing matter. Messages only robustly improve repayment when they include the loan officer's name. This effect holds for clients serviced by the loan officer previously but not for first-time borrowers. Taken together, the results highlight the potential and limits of communications technology for mitigating moral hazard, and suggest that personal obligation/reciprocity between borrowers and bank employees can be harnessed to help overcome market failures. |
| JEL: | D21 D92 G21 O16 O17 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:102&r=mfd |
| By: | Bryan, Gharad (London School of Economics and Innovations for Poverty Action); Karlan, Dean (Yale University and MIT); Zinman, Jonathan (Dartmouth College and MIT) |
| Abstract: | We examine a randomized trial that allows separate identification of peer screening and enforcement of credit contracts. A South African microlender offered half its clients a bonus for referring a friend who repaid a loan. For the remaining clients, the bonus was conditional on loan approval. After approval, the repayment incentive was removed from half the referrers in the first group and added for half those in the second. We find large enforcement effects, a $12 (100 Rand) incentive reduced default by 10 percentage points from a base of 20%. In contrast, we find no evidence of screening. |
| JEL: | C93 D12 D14 D82 O12 O16 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:99&r=mfd |
| By: | Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Hagen, Rune Jansen (University of Bergen); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Many verifiable contracts are impossible or difficult to enforce. This applies to contracts among family and friends, contracts regulating market transactions, and sovereign debt contracts. Do such non-enforceable contracts matter? We use a version of the trust game with participants from Norway and Tanzania to study repayment decisions in the presence of non-enforceable loan contracts. Our main finding is that the specific content of the contract has no effect on loan repayment. Rather, the borrowers seem to be motivated by other moral motives, which contributes to explaining why they partly fulfill non-enforceable contracts. We also show that some borrowers violate the axiom of first order stochastic dominance when rejecting loan offers, which partly may reflect negative reciprocity, but also seems to reflect a fundame tal aversion against uncertainty. |
| Keywords: | Non-enforceable contracts; Lab experiment. |
| JEL: | C91 D63 D80 F34 |
| Date: | 2012–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2012_002&r=mfd |