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on Microfinance |
| By: | Kangogo, Daniel; Lagat, Job; Ithinji, Gicuru |
| Abstract: | Lack of access to credit is a key obstacle for economic development of transitional economies such as Kenya. The underlying problem is related to information asymmetry combined with the lack of collateral by low income households. Microfinance led group lending model offer a new way to deal with this problem without resorting to collateral requirements. The core issue in group lending is that it systematically exploits elements of social capital that inherently exist in groups into an incentive contract that substitutes collateral; a formal bank conventional requirement of lending that is virtually unavailable to the poor. This study sought to ascertain the influence of social capital dimensions on households’ participation and repayment performance in micro-credit groups in the study area. The study was conducted in Moiben Division, Uasin Gishu County, Kenya based on a sample of 174 households selected using a multi-stage sampling technique. The data was collected using a personally administered structured questionnaire. In the analysis descriptive statistics, Heckman two stage and a Tobit regression models were employed. The results show that individual and group borrowers had significant differences in gender, age, farm size, years of education, income and land tenure. It was established that household size, farm income and distance to the nearest financial institution positively influenced a household to join micro-credit group. On the other hand age, gender, years of education, farm size and interest rate were found to be significant and negatively influenced household decision to join micro-credit groups. The level of household participation in micro-credit groups measured by the number of loan borrowings was significantly and positively influenced by age, total income, years of experience in group borrowing and decision making index while farm size, heterogeneity index and density of membership had a negative affect on household number of loan borrowings. Lastly, the results on group loan repayment performance using the Tobit model revealed that experience in group borrowing, number of visits by loan officer, peer pressure, meeting attendance index and heterogeneity index positively and significantly influenced loan default rate while gender, household size, distance to the nearest financial institution and density of membership were significant but negatively influenced household loan repayment performance. The study therefore recommends that MFIs should increase awareness and encourage poor households to form micro-credit groups. These institutions are obliged to provide training to households on group dynamics in order to take advantage of social capital existing within well organized and managed groups. |
| Keywords: | Social capital, Access to Credit, Group Lending, Microfiance, Heckman two step Model, Tobit Model, Loan Repayment, Micro-credit Group |
| JEL: | D7 D71 G2 G23 |
| Date: | 2013–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48624&r=mfd |
| By: | Renuka Sane (Indira Gandhi Institute of Development Research); Susan Thomas (Indira Gandhi Institute of Development Research) |
| Abstract: | In December 2010, the Indian state of Andhra Pradesh passed a law that severely restricted the operations of micro-finance institutions and brought the micro-finance industry to an abrupt halt. We measure the impact of micro-credit withdrawal in this unique natural experiment and find that average household expenditure dropped by 19 percent relative to a control group after the ban. The largest decrease was observed in expenditure on food. There is some evidence of higher volatility in consumption after the ban. All households were affected and not just the borrower households, which may suggest general equilibrium effects. |
| Keywords: | Consumption smoothing, credit, household finance, micro-finance ban, natural experiment |
| JEL: | D14 G21 G28 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2013-013&r=mfd |
| By: | Desai, Raj M.; Joshi, Shareen |
| Abstract: | In response to the problems of high coordination costs among the poor, efforts are underway in many countries to organize the poor through"self-help groups"(SHGs) -- membership-based organizations that aim to promote social cohesion through a mixture of education, access to finance, and linkages to wider development programs. The authors randomly selected 32 of 80 villages in one of the poorest districts in rural India in which to establish SHGs for women. Two years of exposure to these programs increased women's participation in group savings programs as well as the non-agricultural labor force. Compared to women in control villages, treated women were also more likely to participate in household decisions and engage in civic activities. The authors find no evidence however, that participation increased income or had a disproportionate impact by women's socio-economic status. These results are important in light of the recent effort to expand official support to SHGs under the National Rural Livelihood Mission. |
| Keywords: | Access to Finance,Primary Education,Housing&Human Habitats,Population Policies,Social Accountability |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6547&r=mfd |
| By: | Kamdar, Sangita |
| Abstract: | With the growing urbanization in India, removal of poverty in cities through specified government programs has assumed importance. The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) aims at poverty alleviation through the strategy of encouraging self-employment by building capabilities for undertaking entrepreneurial activities. The strategy of the program is to impart skills through training and provide financial assistance to start micro enterprises (business). The program has focused on women especially. This research paper is an empirical study of this program as implemented in Mumbai city. The impact of this program in Mumbai has been evaluated through fieldwork. 100 beneficiaries were selected from the municipal wards where the program was being implemented. The study has ascertained that on an average the augmented income is in the range of ₹ 1000 to ₹ 3000 per month. 30 percent of the families did not undertake any entrepreneurial activity despite being trained under the program. It was also found that 51 percent of those who started entrepreneurial activity were not formally trained under the program. While nearly one-third of those who started enterprises did so in an area other than the one in which training was taken. This highlights the need to strengthen training for skill development. It was also found that a significant number of beneficiaries had assumed some kind of leadership role in the neighbourhood and improved decision making in the household. |
| Keywords: | Micro Enterprises, Self-Employment, Women’s Empowerment, Urban Poverty, Mumbai |
| JEL: | A14 R58 Z1 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48760&r=mfd |
| By: | Kazi, Abdul Kabeer; Mannan, Muhammad Adeel |
| Abstract: | In this research paper we investigated the determinants likely to influence the adoption of mobile banking services, with a special focus on under banked/unbanked low-income population of Pakistan. The adoption of mobile banking services has been a strategic goal, both for banks and telcos. For this purpose, Technology Acceptance Model (TAM) was used, with additional determinants of perceived risk and social influence. Data was collected by surveying 372 respondents from the two largest cities (Karachi and Hyderabad) of the province Sindh, in Pakistan using judgement sampling method. This study empirically concluded that consumers’ intention to adopt mobile banking services was significantly influenced by social influence, perceived risk, perceived usefulness, and perceived ease of use. The most significant positive impact was of social influence on consumers’ intention to adopt mobile banking services. The paper concluded with discussion on results, and several business implications for the banking industry of Pakistan. |
| Keywords: | Mobile banking; technology adoption; social influence; perceived risk; low-income sector; Pakistan |
| JEL: | G2 G20 G21 |
| Date: | 2013–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47922&r=mfd |
| By: | Churchill, Craig; Matul, Michal |
| Keywords: | microinsurance, low income, household income, social protection, insurance, health insurance, life insurance, microassurance, faible revenu, revenu des ménages, protection sociale, assurances, assurance-maladie, assurance-vie, microseguro, bajos ingresos, ingreso de los hogares, protección social, seguros, seguro de enfermedad, seguro de vida |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:469153&r=mfd |