nep-mfd New Economics Papers
on Microfinance
Issue of 2014‒06‒28
six papers chosen by
Olivier Dagnelie
University of Namur

  1. Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico By Gabriela Calderón; Jesse M.Cunha ;; Giacomo De Giorgi      
  2. Access to Credit: Awareness and Use of Formal and Informal Credit Institutions By Alejandra Campero; Karen Kaiser  
  3. Determinants of financial inclusion in Mexico based on the 2012 National Financial Inclusion Survey (ENIF) By Ximena Pena; Carmen Hoyo; David Tuesta
  4. Saving More to Borrow Less: Experimental Evidence from Access to Formal Savings Accounts in Chile By Felipe Kast; Dina Pomeranz
  5. Mobile banking and mobile phone penetration: which is more pro-poor in Africa? By Asongu, Simplice
  6. Determinantes de la inclusion financiera en Mexico a partir de la ENIF 2012 By Ximena Pena; Carmen Hoyo; David Tuesta

  1. By: Gabriela Calderón; Jesse M.Cunha ;; Giacomo De Giorgi      
    Abstract: This paper explores whether the poor performance of many micro-enterprises 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. Economically significant indirect treatment effects on those entrepreneurs randomized out of the program, yet living in treatment villages are observed. We present a simple model that helps interpret our results, and consistent with the theoretical predictions, we find that entrepreneurs with lower baseline profits 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, economic development, micro-enterprise
    JEL: I25 O12 O14
    Date: 2013–12
  2. By: Alejandra Campero; Karen Kaiser  
    Abstract: In this paper we study the determinants of use of formal and informal credit sources. Given that awareness is a necessary step towards use of credit, in order to control for the possible selection bias we decompose the decision to use credit as a two stage decision process in which first, households form their choice set by deciding which type of institutions they want to consider as possible lenders (awareness), and then choose among them (use). Additionally, we allow for correlation between being aware of a specific source of credit and using it. We find evidence that supports the hypothesis that the formal and informal credit markets in Mexico attend different segments of the population. However, our results also show that informal lending sources' characteristics are valued per-se by consumers in certain situations, such as emergencies.
    Keywords: Credit demand, consideration set, informal credit, formal credit, Mexico
    JEL: D1 D14 G2
    Date: 2013–06
  3. By: Ximena Pena; Carmen Hoyo; David Tuesta
    Abstract: Even though 97% of the population in Mexico has at least one access point into the financial system, only 38% has some sort of saving or credit product in a formal financial institution. These figures show the insufficient use of the formal financial system and highlight the importance of analysing the determinant factors for financial inclusion in Mexico in more depth. This paper explores the factors determining financial inclusion in Mexico from the demand side, based on information from the 2012 National Financial Inclusion Survey (ENIF in the Spanish acronym). In order to identify the relevant factors, we have built financial inclusion indicators using the multiple correspondences method of analysis, taking into account whether people have credit and savings products, whether jointly (Aggregate Indicator) or individually (Savings Indicator and Credit Indicator). Using a non-linear regression analysis we endeavour to explain the factors influencing financial inclusion, bearing in mind not only whether people are banked, but also the possession of a set of formal financial products. In addition, we carry out the same analysis for the sub-group in the informal labour market, the sector of the population which generally suffers most financial exclusion. The results obtained for a range of financial inclusion indicators, both for the total population and for workers in informal sectors, show the need for making detailed analyses in order to encourage more participation in the formal financial system, by designing specific public policies for each population group depending on their socio-economic circumstances and geographical location.
    Keywords: Financial Inclusion, Personal finance, Financial institutions
    JEL: G21 G23 G28 O16
    Date: 2014–06
  4. By: Felipe Kast; Dina Pomeranz
    Abstract: Poverty is often characterized not only by low and unstable income, but also by heavy debt burdens. We find that reducing barriers to saving through access to free savings accounts decreases participants' short-term debt by about 20%. In addition, participants who experience an economic shock have less need to reduce consumption, and subjective well-being improves significantly. Precautionary savings and credit therefore act as substitutes in providing self-insurance, and participants prefer borrowing less when a free formal savings account is available. Take-up patterns suggest that requests by others for participants to share their resources may be a key obstacle to saving.
    JEL: D14 D91 G22 O16
    Date: 2014–06
  5. By: Asongu, Simplice
    Abstract: The contribution of this paper to complement theoretical and qualitative mobile penetration literature with empirical evidence is twofold: firstly, we assess the income-redistributive effect of mobile phone penetration and; secondly, the instrumentality of financial development dynamics in this nexus. Main findings suggest an equalizing income-redistributive effect of ‘mobile phone penetration’ and ‘mobile banking’, with a higher income-equalizing effect in the latter than in the former. Poverty alleviation channels explaining this difference in inequality mitigating propensity are discussed. The empirical evidence is based on 52 African countries and deviates from mainstream country-specific and microeconomic survey-based approaches.
    Keywords: Banking; Mobile Phones; Shadow Economy; Financial Development; Africa
    JEL: E00 G20 L96 O17 O33
    Date: 2013–09–15
  6. By: Ximena Pena; Carmen Hoyo; David Tuesta
    Abstract: A pesar de que el 97% de la poblacion en Mexico cuenta con al menos un punto de acceso al sistema financiero, solo el 38% tiene algun producto de ahorro o de cedito en instituciones financieras formales. Dichos resultados evidencian la falta de uso del sistema financiero formal y resaltan la importancia de analizar con mayor profundidad cuales son los factores determinantes de la inclusion financiera en Mexico. El presente trabajo explora los factores que determinan la inclusion financiera en Mexico desde el lado de la demanda, con base en la informacion de la Encuesta Nacional de Inclusion Financiera 2012 (ENIF). Para identificar los factores relevantes, se construyen indicadores de inclusion financiera mediante el metodo de analisis de correspondencias multiples, tomando en cuenta la tenencia de productos de crrdito y de ahorro, tanto de manera conjunta (Indicador Agregado) como de forma individual (Indicador de Ahorro e Indicador de Credito). De tal forma, a traves de un analisis de regresion no lineal se pretende explicar los factores que influyen en la inclusion financiera, considerando no solamente la bancarizacion, sino la tenencia conjunta de productos financieros formales. Adicionalmente, se realiza el mismo analisis para el subgrupo de poblacion que pertenece al mercado laboral informal, sector de la poblacion que generalmente sufre mas exclusion financiera. Los resultados obtenidos para los diferentes tipos de indicadores de inclusión financiera , tanto en la poblacion total como en los trabajadores informales, muestran la necesidad de realizar analisis detallados para fomentar una mayor participacion en el sistema financiero formal, disenando politicas publicas especificas para cada grupo de poblacion acorde con sus caracteristicas socioeconomicas y de ubicacion geografica.
    Keywords: Inclusion financiera, Instituciones financieras, Finanzas personales
    JEL: G21 G23 G28 O16
    Date: 2014–06

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