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on Microfinance |
| By: | Uzma Afzal; Giovanna d'Adda; Marcel Fafchamps; Simon Quinn; Farah Said |
| Abstract: | Standard models often predict that people should either demand to save or demand to borrow, but not both. We hypothesise instead that saving and borrowing among microfinance clients are substitutes, satisfying the same underlying demand: for a regular schedule of deposits and a lump-sum withdrawal. We test this using a framed field experiment among women participating in group lending arrangements in rural Pakistan. The experiment — inspired by the rotating structure of a ROSCA — involves randomly offering credit products and savings products to the same subject pool. We find high demand both for credit products and for savings products, with the same individuals often accepting both a credit product and a savings product over the three experiment waves. This behavior can be rationalised by a model in which individuals prefer lump-sum payments (for example, to finance a lumpy investment), and in which individuals struggle to hold savings over time. We complement our experimental estimates with a structural analysis, in which different ‘types’ of participants face different kinds of constraints. Our structural framework rationalises the behaviour of 75% of participants; of these ‘rationalised’ participants, we estimate that two-thirds have high demand for lump-sum payments coupled with savings difficulties. These results imply that the distinction between microlending and microsaving may be largely illusory; participants value a mechanism for regular deposits and lump-sum payments, whether that is structured in the credit or the debt domain. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-32&r=mfd |
| By: | Pushkar Maitra; Sandip Mitra; Dilip Mookherjee; Alberto Motta; Sujata Visaria |
| Abstract: | We experimentally evaluate two micro-lending schemes to finance high-value smallholder agriculture. Loans featured durations that matched crop cycles, low interest rates, dynamic repayment incentives and index insurance. In the TRAIL design, the lender incentivized a local trader to recommend borrowers for individual-liability loans. In GBL, it offered joint-liability loans to self-formed groups, who attended high-frequency meetings and met savings targets. TRAIL loans increased potato cultivation and farm incomes by 17{21%, but GBL loans had insignificant effects, because TRAIL borrowers were more productive and lower-risk. TRAIL loans had higher repayment and take-up rates, and lower administrative costs than GBL loans. |
| Keywords: | Agricultural Finance, Agent Based Lending, Group Lending, Selection, Repayment |
| JEL: | D82 O1 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2014-35&r=mfd |
| By: | Asadul Islam; Debayan Pakrashi |
| Abstract: | Using a unique panel dataset collected from rural households in Bangladesh, we examine the role of microcredit in the intra-household and inter-sectoral distribution of labour supply. The data also enables us to discuss seasonality in labour supply. We find robust evidence that the effects of microcredit on labour supply are not symmetrical across occupations and genders and access to microcredit could not smooth out the seasonality in the labour supply. The overall results suggest that opportunities for diversification into market oriented activities remain limited, even when an access to microcredit relaxes the financial constraints faced by households in rural Bangladesh. |
| Keywords: | microcredit, labour supply, intra-household, seasonality. |
| JEL: | J01 J16 J22 J82 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2014-24&r=mfd |
| By: | Hugo Pablo Rocha Portugal (Institute for Advanced Development Studies (INESAD)); Diego A. Vera Cossio (University of California) |
| Abstract: | La presente investigacion contribuye con evidencia acerca del efecto del ahorro en cuatro medidas de empoderamiento femenino. Estimamos un modelo de tratamiento endógeno para el acceso a ahorro en el sistema formal en 2004 utilizando como variable de exclusión el número de agencias de servicios financieros por cada 1.000 habitantes a nivel ciudad en 1996. Utilizamos datos de la Encuesta de Hábitos de Ahorro (2004), que recolecta información acerca de las actitudes frente al consumo y al ahorro de 3.000 hogares en zonas urbanas de Bolivia, con la que construimos varias medidas de empoderamiento femenino, ahorro formal y gastos del hogar. Cuatro lecciones importantes se desprenden de este estudio. En primer lugar, el ahorro formal tiene un efecto sobre algunas medidas de empoderamiento, este efecto se re fleja en reasignaciones de tiempo en las actividades del hogar: las mujeres que trabajan fuera de casa dedican menos tiempo a la administración de los gastos. Segundo, la magnitud del efecto del ahorro depende de la liquidez del tipo de instrumento financiero que se utilice para ahorrar. Tercero, distinguimos que el ahorro per se no tiene efectos sobre el empoderamiento; la forma en la que se ahorra hace la diferencia, al aplicar la misma metodología al ahorro informal no encontramos ningún efecto signicativo. Finalmente, no encontramos evidencia de que el ahorro formal incremente el gasto en educación. |
| Keywords: | Empoderamiento femenino, acceso financiero, ahorro, microfinanzas, Bolivia |
| JEL: | I14 I24 I32 I38 J13 J16 J71 G20 G21 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:201406&r=mfd |
| By: | Ggombe Kasim Munyegera (National Graduate Institute for Policy Studies); Tomoya Matsumoto (National Graduate Institute for Policy Studies) |
| Abstract: | Mobile money service in Uganda has expanded rapidly, penetrating as much as over 30 percent of the adult population in just four years since its inception. We investigate the impact of this financial innovation on household welfare, using household survey panel data from rural Uganda. Results from our preferred specification reveal that adopting mobile money services increases household per capita consumption by 72 percent. The mechanism of this impact is the facilitation of remittances; user households are more likely to receive remittances, receive remittances more frequently and the total value received is significantly higher than that of non-user households. Our results are robust to a number of robustness checks. JEL (O16, O17, O33, I131) |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:14-22&r=mfd |
| By: | Nicholas Economides (Stern School of Business, New York University); Przemyslaw Jeziorski (Haas School of Business, UC Berkeley) |
| Abstract: | In developing countries with sparse retail banking branches, mobile telecom net- works have emerged as major providers of financial services bypassing traditional banks. Using individual-level mobile money transaction data in Tanzania, we find that the vast majority of these transactions can be classified as either (i) transferring money to others, (ii) transporting money for short distances, or (iii) storing money for short to medium periods of time. We find that the demand for long-distance transfers is less elastic than for short-distance transfers suggesting that the mobile networks compete with traditional cash transportation by bus drivers, in addition to competing with each other. Using the revealed preferences for transportation and storage transactions, we monetize the economic damage caused by a high level of crime. We estimate the willingness to pay to avoid walking with cash an extra kilometer and to avoid storing money at home for an extra day to be 1.1% and 1% of an average transaction, respectively. We propose a Pareto superior price discrimination scheme where cash-out fees that follow a transfer are set to zero, while otherwise cash-out fees are set a bit below transfer fees. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1424&r=mfd |