|
on Microfinance |
| By: | Banerjee, Abhijit; Duflo, Esther; Glennerster, Rachel; Kinnan, Cynthia |
| Abstract: | This paper reports on the first randomized evaluation of the impact of introducing the standard microcredit group-based lending product in a new market. In 2005, half of 104 slums in Hyderabad, India were randomly selected for opening of a branch of a particular microfinance institution (Spandana) while the remainder were not, although other MFIs were free to enter those slums. Fifteen to 18 months after Spandana began lending in treated areas, households were 8.8 percentage points more likely to have a microcredit loan. They were no more likely to start any new business, although they were more likely to start several at once, and they invested more in their existing businesses. There was no effect on average monthly expenditure per capita. Expenditure on durable goods increased in treated areas, while expenditures on “temptation goods” declined. Three to four years after the initial expansion (after many of the control slums had started getting credit from Spandana and other MFIs ), the probability of borrowing from an MFI in treatment and comparison slums was the same, but on average households in treatment slums had been borrowing for longer and in larger amounts. Consumption was still no different in treatment areas, and the average business was still no more profitable, although we find an increase in profits at the top end. We found no changes in any of the development outcomes that are often believed to be affected by microfinance, including health, education, and women’s empowerment. The results of this study are largely consistent with those of four other evaluations of similar programs in different contexts. |
| Keywords: | Microfinance |
| JEL: | D21 G21 O16 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9437&r=mfd |
| By: | Angelucci, Manuela; Karlan, Dean S.; Zinman, Jonathan |
| Abstract: | Theory and evidence have raised concerns that microcredit does more harm than good, particularly when offered at high interest rates. We use a clustered randomized trial, and household surveys of eligible borrowers and their businesses, to estimate impacts from an expansion of group lending at 110% APR by the largest microlender in Mexico. Average effects on a rich set of outcomes measured 18-34 months post-expansion suggest some good and little harm. Other estimators identify heterogeneous treatment effects and effects on outcome distributions, but again yield little support for the hypothesis that microcredit causes harm. |
| Keywords: | Compartamos Banco; microcredit; microcredit impact; microentrepreneurship |
| JEL: | D12 D22 G21 O12 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9506&r=mfd |
| By: | Allen, Franklin; Carletti, Elena; Cull, Robert; Qian, Jun; Senbet, Lemma; Valenzuela, Patricio |
| Abstract: | Using household surveys and bank penetration data at the district-level in 2006 and 2009, this paper examines the impact of Equity Bank -- a leading private commercial bank focusing on microfinance -- on access to banking in Kenya. Unlike other commercial banks in Kenya, Equity Bank pursues distinct branching strategies that target underserved areas and less-privileged households. Equity Bank presence has a positive and significant impact on households'use of bank accounts and bank credit, especially for Kenyans with low income, no salaried job, and less education and those who do not own their own home. The findings are robust to using the district-level proportion of people speaking a minority language as an instrument for Equity Bank presence. It appears that Equity Bank's business model -- providing financial services to population segments typically ignored by traditional commercial banks and generating sustainable profits in the process -- can be a solution to the financial access problem that has hindered the development of inclusive financial sectors in many African countries. |
| Keywords: | Banks&Banking Reform,Access to Finance,Public Sector Corruption&Anticorruption Measures,Corporate Law,Debt Markets |
| Date: | 2013–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6593&r=mfd |
| By: | Saeed Al-Muharrami; Daniel C. Hardy |
| Abstract: | Islamic and cooperative banks such as credit unions are broadly similar in that they both share some risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers and downside risk with depositors. Islamic banking is consistent with mutual ownership, which may ease some of the governance and efficiency concerns implied by Shari’ah constraints. Greater risk sharing among cooperative bank stakeholders, using mechanisms embedded in Islamic financial products, may strengthen cooperatives’ financial resilience. |
| Keywords: | Islamic banking;Banks;Financial instruments;Financial institutions;Corporate governance;Islamic Banks, Cooperative Banks, Credit Unions, Profit and Loss Sharing, Mutualization |
| Date: | 2013–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:13/184&r=mfd |