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on Microfinance |
| By: | Berg, Claudia; Emran, M. Shahe; Shilpi, Forhad |
| Abstract: | Using two surveys from Bangladesh, this paper provides evidence on the effects of microfinance competition on village moneylender interest rates and households'dependence on informal credit. The views among practitioners diverge sharply: proponents claim that competition of microfinance institutions reduces both the moneylender interest rate and households'reliance on informal credit, while the critics argue the opposite. Taking advantage of recent econometric approaches that address selection on unobservables without imposing standard exclusion restrictions, this paper finds that microfinance competition does not reduce moneylender interest rates, thus partially repudiating the proponents. The effects are heterogeneous; there is no perceptible effect at low levels of coverage, but when microfinance coverage is high enough, the moneylender interest rate increases significantly. In contrast, households'dependence on informal credit tends to go down after they become a member of a microfinance institution, which contradicts part of the critic's argument. The evidence is consistent with a model where microfinance institutions draw away better borrowers from the moneylender, and fixed costs are important in informal lending. |
| Keywords: | Access to Finance,Debt Markets,Banks&Banking Reform,Economic Theory&Research,Emerging Markets |
| Date: | 2013–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6619&r=mfd |
| By: | Ojo, Marianne |
| Abstract: | This paper not only addresses how linkages, direct and facilitating linkages, can benefit microfinance institutions – and particularly in jurisdictions where the Savings Group Outreach involvement is particularly low, but also illustrates ways and means whereby group lending and other more recent innovative methods used by micro lenders to secure repayments, could increase the desired effects, efficiency and impact of microfinance in selected jurisdictions. In so doing, it addresses some of the existing and persisting problems of micro finance in rural areas. An innovative aspect of the paper is evidenced through its recommendation of the Micro-Savings Requirement Scheme - which offers numerous benefits – as will be highlighted in this paper. |
| Keywords: | microfinance; regulation; agency theory; Micro-Savings Requirement Scheme |
| JEL: | E2 E6 G2 G21 G23 G28 K2 |
| Date: | 2013–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50199&r=mfd |
| By: | Felix Meier zu Selhausen; Erik Stam |
| Abstract: | This study on female entrepreneurs in Western Uganda provides empirical evidence on the socio-economic effects of participation in a microfinance cooperative of both the female entrepreneur and her husband. Participation by female entrepreneurs in a microfinance cooperative is not an unconditional blessing: even though it does deliver higher household incomes, it might also deteriorate the female's household decision-making power when her husband participates in the same self-help group of the microfinance cooperative. This offers new insights for development policy and for entrepreneurship scholars to study the bright and dark sides of microfinance. |
| Keywords: | microfinance, cooperatives, female entrepreneurship, coffee, Uganda |
| JEL: | J16 J54 L26 N27 O15 O16 Q13 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1310&r=mfd |
| By: | Jing You; Samuel Annim |
| Abstract: | Abstract This paper assesses causal effects of formal microcredit on children’s educational outcomes by using household panel data (2000 and 2004) in a poor province of northwest rural China. The unobservables between borrowers and non-borrowers are controlled in static and dynamic regression-discontinuity designs. The static analysis reveals significant positive impact of microcredit on children’s schooling years (captured by late entry, failed grades and suspended schooling from time to time) in 2000 only, and no indication of influence on academic performance for both rounds of survey. The dynamic analysis shows progressive treatment effects of microcredit on both longer schooling years and higher average scores. Formal microcredit appears to improve education in the longer term compared to the short term, and hence may have potential in relaxing the grip of educational poverty traps. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:18313&r=mfd |
| By: | Beck, T.H.L.; Lu, L.; Yang, R. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: Using a survey dataset of Chinese rural households, we find that access to external finance is positively associated with the decision to become entrepreneur, the initial investment for microenterprises and the use of external finance. Also, we find that the use of informal finance is positively associated with sales growth of microenterprises with employees, but not of self-employed. We do not find any significant relationship between the use of formal finance and firm growth. Our findings underline the importance of finance for entrepreneurship and microenterprise growth, and the role of informal finance in the absence of efficient formal financial institutions. |
| Keywords: | Finance;Entrepreneurship;Growth;China. |
| JEL: | L26 G21 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013053&r=mfd |