nep-mfd New Economics Papers
on Microfinance
Issue of 2015‒02‒28
eight papers chosen by
Olivier Dagnelie
Université de Namur

  1. Facilitating Savings for Agriculture: Field Experimental Evidence from Malawi By Lasse Brune ; Xavier Giné ; Jessica Goldberg ; Dean Yang
  2. Short-term impacts of formalization assistance and a bank information session on business registration and access to finance in Malawi By Campos, Francisco ; Goldstein, Markus ; McKenzie, David
  3. Impact of Weather Insurance on Small Scale Farmers: A Natural Experiment By Stephan Dietrich ; Marcela Ibanez
  4. Gender Biases in Bank Lending: Lessons from Microcredit in France By Anastasia Cozarenco ; Ariane Szafarz
  5. Handling the weather : insurance, savings, and credit in West Africa By de Nicola, Francesca
  6. Assessment of the DSWD SEA-K Strategy By Orbeta, Aniceto Jr. C. ; Llanto, Gilberto M. ; Rosellon, Maureen Ane D. ; Ballesteros, Marife M. ; Magtibay, Jasmine E. ; Bolanos, Larraine ; Salazar, Christine
  7. Financial inclusion and its determinants: the case of Argentina By David Tuesta ; Gloria Sorensen ; Adriana Haring ; Noelia Camara
  8. Inclusion financiera y sus determinantes: el caso argentino By David Tuesta ; Gloria Sorensen ; Adriana Haring ; Noelia Camara

  1. By: Lasse Brune ; Xavier Giné ; Jessica Goldberg ; Dean Yang
    Abstract: We implemented a randomized intervention among Malawian farmers aimed at facilitating formal savings for agricultural inputs. Treated farmers were offered the opportunity to have their cash crop harvest proceeds deposited directly into new bank accounts in their own names, while farmers in the control group were paid harvest proceeds in cash (the status quo). The treatment led to higher savings in the months immediately prior to the next agricultural planting season, and raised agricultural input usage in that season. We also find positive treatment effects on subsequent crop sale proceeds and household expenditures. Because the treatment effect on savings was only a small fraction of the treatment effect on the value of agricultural inputs, mechanisms other than alleviation of savings constraints per se are needed to explain the treatment’s impact on input utilization. We discuss other possible mechanisms through which treatment effects may have operated.
    JEL: D03 D91 O16 Q14
    Date: 2015–02
  2. By: Campos, Francisco ; Goldstein, Markus ; McKenzie, David
    Abstract: Despite regulatory efforts designed to make it easier for firms to formalize, informality remains extremely high among firms in Sub-Saharan Africa. In most of the region, business registration in a national registry is separate from tax registration. This paper provides initial results from an experiment in Malawi that randomly allocated firms into a control group and three treatment groups: a) a group offered assistance for costless business registration; b) a group offered assistance with costless business registration and (separate) tax registration; and c) a group offered assistance for costless business registration along with an information session at a bank that ended with the offer of business bank accounts. The study finds that all three treatments had extremely large impacts on business registration, with 75 percent of those offered assistance receiving a business registration certificate. The findings offer a cost-effective way of getting firms to formalize in this dimension. However, in common with other studies, information and assistance has a limited impact on tax registration. The paper measures the short-term impacts of formalization on financial access and usage. Business registration alone has no impact for either men or women on bank account usage, savings, or credit. However, the combination of formalization assistance and the bank information session results in significant impacts on having a business bank account, financial practices, savings, and use of complementary financial products.
    Keywords: Business in Development,Competitiveness and Competition Policy,Business Environment,E-Business,Access to Finance
    Date: 2015–01–01
  3. By: Stephan Dietrich (Georg-August-University Göttingen ); Marcela Ibanez (Georg-August-University Göttingen )
    Abstract: This paper explores the impacts of traditional agricultural insurance that offers protection against climatic shocks on small-scale tobacco farmers in Colombia. We analyze the impacts of access to the insurance on household financial outcomes after a period of severe climatic events that caused substantial crop failures. Our identification strategy benefits from a natural experimental setup of the form in which the insurance was launched. We find that tobacco producers with access to the insurance program were less likely to acquire informal loans, were less likely to use loans to repay debts, and had access to loans with lower interest rates and longer maturation periods. Moreover, access to this program was positively associated with increased savings and accumulation of liquid assets.
    Keywords: Insurance; Credit; Natural Disasters; Risk Management; Colombia
    JEL: G22 G23 O13 O16 Q14
    Date: 2015–02–23
  4. By: Anastasia Cozarenco ; Ariane Szafarz
    Abstract: The evidence on gender discrimination in lending remains controversial. To capture gender biases in banks’ loan allocations, we observe the impact on the applicants of a microfinance institution (MFI) and exploit the natural experiment of a regulatory change imposing a strict EUR 10,000 loan ceiling on microcredit. Descriptive statistics indicate that the presence of the ceiling is associated both with bank-MFI co-financing and with harsher treatment of female borrowers. To investigate causal links, we develop an econometric approach that addresses the concerns of selection biases, multicollinearity, and endogeneity. Our empirical findings suggest that the change in the MFI’s gender-related attitude was triggered by banks through co-financing. Hence, we speculate that co-financing pushes ceiling-constrained MFIs to import whatever biases in loan granting that the banks are prone to. Overall, this paper stresses that apparently benign regulations such as loan ceilings can significantly harm the women’s empowerment efforts made by MFIs.
    Keywords: Microcredit; bank; loan ceiling; gender; France
    JEL: G21 J16 M13 L51 G28 O52 I38
    Date: 2015–02–25
  5. By: de Nicola, Francesca
    Abstract: Farmers in developing countries face a wide array of risks. Yet they often lack formal financial instruments to protect against risks. This paper examines the impact on consumption, investment, and welfare of the separate provision of three financial products: weather insurance, savings, and credit. The paper develops a dynamic stochastic mode to capture the essential features of the lives of West African rural households. The model is calibrated with data from farmers in Burkina Faso and Senegal, to assess quantitatively the effects of three policy interventions. For each intervention the analysis first considers a benchmark scenario that abstracts from the flaws that affect each instrument; later the assumptions are relaxed. Weather insurance offers the largest welfare gains at each level of wealth, although the gains are significantly reduced by introducing a multiple on the insurance premium. Over time, however, savings can lead to substantial gains, higher than those achievable by unsubsidized weather insurance.
    Keywords: Debt Markets,Climate Change Economics,Economic Theory&Research,Financial Intermediation,Banks&Banking Reform
    Date: 2015–02–01
  6. By: Orbeta, Aniceto Jr. C. ; Llanto, Gilberto M. ; Rosellon, Maureen Ane D. ; Ballesteros, Marife M. ; Magtibay, Jasmine E. ; Bolanos, Larraine ; Salazar, Christine
    Abstract: This study looks at the effectiveness of the strategy and the complementary interventions of the Sustainable Livelihood Program`s Self-Employment Assistance Kaunlaran (SLP SEA-K). The SLP SEA-K uses a microcredit strategy which intends to provide credit access to the poor, improve the ability of the group to borrow, and enable it to engage in income-generating activities. Microcredit services are generally believed to have a positive socioeconomic impact; however, the success of projects may depend largely on the management of the program. The authors of this study found out that the government lacks the capacity to handle microcredit programs. Additionally, they see the one-size-fits-all strategy of the program as a problem because of the diverse range of beneficiary profiles.
    Keywords: Philippines, microcredit, livelihood, microenterprise
    Date: 2015
  7. By: David Tuesta ; Gloria Sorensen ; Adriana Haring ; Noelia Camara
    Abstract: This paper analyses the three dimensions determining financial inclusion in the case of Argentina, from a micro-economic perspective. On the supply side, formal financial services are accessed through traditional channels: branches and ATMs, with an as-yet incipient regulation for financial inclusion, unlike the situation in neighbouring countries. In terms of use, a person’s level of education, income and age are all important variables which determine whether they have financial products such as accounts, credit and debit cards, formal credit and electronic payments. Finally, the factors affecting the perception of different barriers of involuntary exclusion are: income and age.
    Keywords: Argentina, Financial Inclusion, Latin America, Research, Working Paper
    JEL: D14 G21
    Date: 2015–01
  8. By: David Tuesta ; Gloria Sorensen ; Adriana Haring ; Noelia Camara
    Abstract: El presente estudio pretende analizar, desde un punto de vista microeconomico, las tres dimensiones que determinan la inclusion financiera para el caso de Argentina. Desde el lado de la oferta se tiene que el acceso a los servicios financieros formales se basa en los canales tradicionales: sucursales y ATMs y la regulacion para la inclusion financiera es todavia incipiente, a diferencia de lo que ocurre en paises vecinos. En lo que respecta al uso, el nivel educativo, el ingreso y la edad son variables importantes que determinan la tenencia de diferentes productos financieros como cuentas, tarjetas de credito y debito, credito formal o pagos electronicos. Finalmente, los factores que afectan a la percepcion de diferentes barreras de exclusion involuntaria son el nivel de ingreso y la edad.
    Keywords: Argentina, Documento de Trabajo, Latam, inclusion financiera, investigacion
    JEL: D14 G21
    Date: 2015–01

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