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on Microfinance |
| By: | Mina Baliamoune-Lutz; Zuzana Brixiová; Léonce Ndikumana |
| Abstract: | Limited access of entrepreneurs to credit constrains the creation and growth of private firms. In Africa, access to credit is particularly limited for small and medium enterprises (SMEs) due to unclear property rights and the lack of assets that can be used as collateral. This paper presents a model where firm creation and growth hinge on matching potential entrepreneurs with productive technologies, while firm growth depends on acquired capital. The shortage of collateral creates a binding credit constraint on borrowing by SMEs and hence private sector growth and employment, even though the banking sectors have ample liquidity, as is the case in many African countries. The model is tested using a sample of 20 African countries over the period 2005-09. The empirical results suggest that policies aimed at easing the binding credit constraints (e.g., the depth of credit information and the strength of legal rights pertaining to collateral and bankruptcy) would stimulate productive entrepreneurship and private sector employment in Africa. |
| Keywords: | credit constraints; productive entrepreneurship; employment, policies |
| JEL: | G21 L26 D24 |
| Date: | 2011–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2011-1025&r=mfd |
| By: | Kaliappa Kalirajan; Kanhaiya Singh |
| Abstract: | In order to fight back poverty, the Central as well as States Governments in India have attempted a number of programs leading to income generation. Like in any developing country, poor governance with lack of proper focus in implementing the programs are the main sources contributing to low human capital development and thereby to rising number of people living below the poverty line in India. The poverty alleviation programs target the people living below poverty line or just above poverty line through self help group units. The empirical analysis presented in this study, which is based on the primary survey data, clearly indicates that the self help group movement in Uttarakhand State in North India is poorly targeted at the poor, though it is a general programme of raising income in the rural areas. Lack of initiatives by the concerned authorities of the self help group movement and the state government in encouraging the poor to work in groups for a common cause of reducing poverty is the basic problem identified in the state. Another critical factor is the limited availability of traditional economic activities to leverage the skill with more efficient methods and affordable credit. The policy conclusion of this study is that there is an urgent need to improve the self help group system by implementing an approach, which should aim at the ultimate goal of poverty alleviation rather than just providing one time employment generation. |
| Keywords: | self help group, self help group and banking, poverty, Uttarakhand State |
| JEL: | I31 I38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2012-02&r=mfd |
| By: | Hernandez-Hernandez, Emilio; Sam, Abdoul G.; Gonzalez-Vega, Claudio; Chen, Joyce J. |
| Abstract: | The literature suggests Conditional Cash Transfers (CCT) and remittances may protect poor households from income risk. We present a theoretical framework that explores how this ‘insurance’ effect can change households’ decision to apply for a loan via changes in credit demand and supply. Empirical evidence from poor rural households in Nicaragua shows CCTs did not affect loan requests while remittances increased them. The risk protection provided by remittances seems stronger, relative to CCTs, such that improvements on borrowers’ expected marginal returns to a loan or on creditworthiness more than offset decreasing returns to additional income. This suggests those transfers that best protect households from income risk favor financial deepening in the context of segmented markets. |
| Keywords: | Credit markets; migration; conditional cash transfers; Nicaragua |
| JEL: | F22 O15 D14 |
| Date: | 2012–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38339&r=mfd |
| By: | Tengeh, Robertson Khan /RKT; Ballard, Harry / HB; Slabbert, Andre /AS |
| Abstract: | Drawing a sample of 135 successful African immigrant-owned businesses, this paper sets out to investigate how their owners acquired the necessary capital for start-up and growth thereafter. The paper was designed within the quantitative and qualitative research paradigms, in which a triangulation of three methods was utilised to collect and analyse the data. The paper revealed that although African immigrants are characteristically at the disadvantage when it comes to accessing capital from formal financial institutions, this does not stop them from pursuing entrepreneurial activities. At the start-up stage, they typically resort to personal savings, business credit, family credit, and loans from informal financial institutions. According to the ability to raise capital, we found that a varying range of start-up capital was utilised, which tended to vary across the different ethnic groups studied. Once started, we found that the sources of additional finance available to these immigrants did not change significantly. They conventionally turned to friends, co-ethnics and self-help financial associations to ‘feed’ their need for further funding. |
| Keywords: | business start-up; immigrant-owned businesses; African immigrants; finance; capital; and South Africa |
| JEL: | M1 A10 M13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38405&r=mfd |