nep-mfd New Economics Papers
on Microfinance
Issue of 2013‒04‒06
two papers chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

  1. Exploring the determinants of the productivity of microfinance institutions in India By Twaha, Koire; Rashid, Abdul
  2. Financial Crisis in Asia: Its Genesis, Severity and Impact on Poverty and Hunger By Katsushi S. Imai; Raghav Gaiha; Ganesh Thapa; Samuel Kobina Annim

  1. By: Twaha, Koire; Rashid, Abdul
    Abstract: This paper attempts to investigate the determinants of productivity in microfinance institutions (MFIs) in India using the Empirical Bayesian technique. To do this, we utilize an unbalanced panel data set covering the period 2005-2011 with 292 observations from 64 institutions.Based on theoretical grounds, three broad factors are specified: institutional characteristics, outreach, and efficiency. We find convincing evidence that institutional characteristics and outreach have both positive and negative effects on the productivity of MFIs, depending of the proxy used in the analysis. However,the efficiency of MFIs affects the productivity negatively. Specifically, we find that the age of the institution positively influences the productivity by 6.1581 points, while number of offices and number of personnel negatively affect it by 26.41% and 8.77%, respectively. Of the outreach variables, numbers of active borrowers positively influence productivity by 0.04%, whereas, average loan size appears to have an inverse relationship with productivity. We further find that cost per loan – a proxy for efficiency, has a negative and statistically significant impact of 1.9604 points on the productivity of MFIs. Overall, our investigation suggests that there is a need to build client confidence, pursue innovative credit delivery techniques in reaching out to the poor and achieving high levels of productivity.
    Keywords: productivity, microfinance institutions, efficient, outreach,and Empirical Bayesian Estimation Technique
    JEL: G2 G21
    Date: 2012–12–15
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:45715&r=mfd
  2. By: Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan)); Raghav Gaiha (Department of Urban Studies and Regional Planning, MIT, Cambridge, USA); Ganesh Thapa (International Fund for Agricultural Development, Rome, Italy); Samuel Kobina Annim (University of Manchester, UK)
    Abstract: Building on the recent literature on finance, growth and hunger, we have examined the experience of Asian countries over the period 1960-2010 by dynamic and static panel data models. We have found evidence favouring a positive role of finance - defined as private credit by banks - on growth of GDP and agricultural value added. Private credit as well as loans from the World Bank significantly reduces undernourishment, while remittances and loans from microfinance institutions appear to have a negative impact on poverty. Our empirical evidence shows that growth performance was significantly lower during the recent global financial crisis than non-crisis periods, though the severity is much smaller during the recent financial crisis than Asian financial crisis.
    Keywords: Finance, Economic Development, Agriculture, Inequality, Poverty, Asia
    Date: 2013–03
    URL: http://d.repec.org/n?u=RePEc:kob:dpaper:dp2013-10&r=mfd

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