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on Microfinance |
| By: | Jaikishan Desai; Kristin Johnson; Alessandro Tarozzi |
| Abstract: | We use data from a randomized controlled trial conducted in 2003-2006 in rural Amhara and Oromiya (Ethiopia) to study the impacts of the introduction of micro finance in treated communities. We document that borrowing increased substantially in locations where the programs started their operations, but we find mixed evidence of improvements in a number of socio-economic outcomes, including income from agriculture, animal husbandry, non-farm self-employment, schooling and indicators of women's empowerment. |
| Keywords: | microcredit, cluster randomized controlled trial, Ethiopia |
| JEL: | O12 O16 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:741&r=mfd |
| By: | Sugato Chakravarty (Purdue University); S. M. Zahid Iqbal (Purdue University); Abu Zafar M. Shahriar (Monash University) |
| Abstract: | We use controlled experiments to identify the proximal causes of gender differences in the repayment of microcredit. We recruit male and female subjects from a patriarchal and a matrilineal community in Bangladesh, who live in the same villages, and find that the female subjects have a greater willingness to repay microcredit in every society irrespective of the type of loan. Thus, the observed gender differences in the repayment of microcredit cannot be explained by the different roles that women play in different societies. In other words, women are “naturally” better credit risks than men in microcredit. We confirm that our results are not driven by the common culture and values among our subjects that stem from geographical proximity. |
| Keywords: | microfinance,nature; nurture; competition; loan repayment |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:csr:wpaper:1019&r=mfd |
| By: | Mariya Pylypiv (Purdue University); Sugato Chakravarty (Purdue University) |
| Abstract: | WWe use multilevel analysis to examine the effect of different types of subsidized funding (private vs. public) on microfinance institutions’ (MFIs) borrower repayment rates. Using information from Mixmarket data on 947 MFIs over a 10-year period (2000-2010) we find that private funding is positively related to MFIs’ abilities to screen borrowers and to monitor borrower repayment rates. We find that MFIs that have higher proportion of private donor funds to public subsidies have lower rates of portfolios at risk, fewer delinquent loans, and that their overall portfolios are less risky. Moreover, we find that regulated MFIs (vs. non-regulated MFIs) have lower rates of borrower delinquency, while for-profit MFIs have higher rates of written-off loans relative to their non-profit counterparts. Our findings promote a greater understanding of different lending practices used within MFIs with different organizational status (regulated vs. non-regulated, profit vs. not-for-profit) and identify strategies for a more efficient allocation of donor funds. |
| Keywords: | microfinance, subsidies, donations, loan repayment, loan portfolio, writer off ratio; |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:csr:wpaper:1018&r=mfd |
| By: | Gabriela Calderón; Jesse M. Cunha; Giacomo De Giorgi |
| Abstract: | A large share of the poor in developing countries run small enterprises, often earning low incomes. This paper explores whether the poor performance of businesses can be explained by a lack of basic business skills. We randomized the offer of a free, 48-hour business skills course to female entrepreneurs in rural Mexico. We find that those assigned to treatment earn higher profits, have larger revenues, serve a greater number of clients, are more likely to use formal accounting techniques, and more likely to be registered with the government. Indirect treatment effects on those entrepreneurs randomized out of the program, yet living in treatment villages, are economically meaningful, yet imprecisely measured. We present a simple model of experience and learning that helps interpret our results, and consistent with the theoretical predictions, we find that “low-quality” entrepreneurs are the most likely to quit their business post-treatment, and that the positive impacts of the treatment are increasing in entrepreneurial quality. |
| Keywords: | business literacy, development, entrepreneurship |
| JEL: | C93 I25 O12 O14 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:742&r=mfd |
| By: | Carmen Hoyo; Ximena Pena; David Tuesta |
| Abstract: | In Mexico 62% of adults between the ages of 18 and 70 do not have formal savings or credit products, even though 97% of adults have access to them through different channels. The difference between the supply and the effective use of the financial system means the existence of demand barriers that have not been explored fully so far. Thanks to the interest of the Mexican government in measuring and evaluating financial inclusion from the point of view of supply and demand, the first National Financial Inclusion Survey (Encuesta Nacional de Inclusión Financiera, ENIF) was applied in 2012 in Mexico. It has become a model in Latin America for the study of demand for financial services. Using ENIF data, and a probit model, we have analyzed the socioeconomic factors that from the point of view of individual demand, influence the decision of whether or not to use formal saving or credit financial services in Mexico. According to our analysis, the insufficiency or variability of income and self-exclusion are the most important barriers in the Mexican market. They are influenced by three types of factors: 1) variables that denote individual vulnerability, such as income level, gender, education and occupation; 2) geographical variables with respect to the size of the community in which the individual lives (towns with a population of less than 15,000 or more than 15,000; and 3) variables that appear related to a preference for the informal financial market, such as the capacity to respond to exogenous shocks and belonging to households with a capacity to save. |
| Keywords: | financial inclusion, financial institutions, barriers, personal finance |
| JEL: | C01 D14 G21 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1337&r=mfd |
| By: | Carmen Hoyo; Ximena Pena; David Tuesta |
| Abstract: | En Mexico el 62 por 100 de los adultos entre 18 y 70 anos no tiene productos de ahorro o de credito en instituciones financieras formales, a pesar de que el acceso a traves de distintos canales esta disponible para el 97 por 100 de los adultos. La diferencia entre la oferta y el uso efectivo del sistema financiero supone la existencia de barreras de demanda que han sido poco exploradas hasta el momento. Gracias al interes del gobierno mexicano para medir y evaluar la inclusion financiera desde el punto de vista de la oferta y de la demanda, en el ano 2012 en Mexico se aplico la primera Encuesta Nacional de Inclusióon Financiera (ENIF), la cual se constituye en un referente en America Latina para el estudio de la demanda de servicios financieros. Con los datos de la ENIF, a partir de un modelo probit, analizamos los factores socioeconomicos que desde el punto de vista de la demanda individual influyen en la decision de no usar los servicios financieros formales de ahorro o credito en Mexico. De acuerdo con el analisis realizado, la insuficiencia o variabilidad del ingreso y la autoexclusion son las barreras mas importantes en el mercado mexicano, las cuales están influidas por tres tipos de factores: 1. variables que denotan vulnerabilidad individual como el nivel de ingresos, el genero, la educacion y la ocupacion; 2. Variable geografica sobre el tamano de la comunidad donde habita el individuo (localidades con menos de 15 mil habitantes o mas de 15 mil habitantes); y 3. variables que parecen relacionarse con la preferencia por el mercado financiero informal, como la capacidad de responder a shocks exogenos y el pertenecer a hogares con capacidad de ahorro. |
| Keywords: | inclusion financiera, instituciones financieras, barreras, finanzas personales |
| JEL: | C01 D14 G21 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1336&r=mfd |