|
on Microfinance |
| By: | Callen, Michael (Harvard University); De Mel, Suresh (University of Peradeniya); McIntosh, Craig (University of CA, San Diego); Woodruff, Christopher (University of Warwick) |
| Abstract: | When households increase their deposits in formal bank savings accounts, what is the source of the money? We combine high-frequency surveys with an experiment in which a Sri Lankan bank used mobile Point-of-Service (POS) terminals to collect deposits directly from households each week. In this context, the headwaters of formal savings are to be found in sacrificed leisure time: households work more, and work more on the wage market when savings options improve. These results suggest that the labor allocation channel is an important mechanism linking savings opportunities to income. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp15-011&r=all |
| By: | Beaman, Lori (Northwestern University); Karlan, Dean (Yale University and Innovations for Poverty Action); Thuysbaert, Bram (Ghent University); Udry, Christopher (Yale University) |
| Abstract: | We partnered with a micro-lender in Mali to randomize credit offers at the village level. Then, in no-loan control villages, we gave cash grants to randomly selected households. These grants led to higher agricultural investments and profits, thus showing that liquidity constraints bind with respect to agricultural investment. In loan-villages, we gave grants to a random subset of farmers who (endogenously) did not borrow. These farmers have lower--in fact zero--marginal returns to the grants. Thus we find important heterogeneity in returns to investment and strong evidence that farmers with higher marginal returns to investment self-select into lending programs. |
| JEL: | D21 D92 O12 O16 Q12 Q14 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:135&r=all |
| By: | Field, Erica (Duke University); Jayachandran, Seema (Northwestern University); Pande, Rohini (Harvard University); Rigol, Natalia (MIT) |
| Abstract: | Does the lack of peers contribute to the observed gender gap in entrepreneurial success, and is the constraint stronger for women facing more restrictive social norms? We offered two days of business counseling to a random sample of customers of India's largest women's bank. A random sub-sample was invited to attend with a friend. The intervention had a significant immediate impact on participants' business activity, but only if they were trained in the presence of a friend. Four months later, those trained with a friend were more likely to have taken out business loans, were less likely to be housewives, and reported increased business activity and higher household income. The positive impacts of training with a friend were stronger among women from religious or caste groups with social norms that restrict female mobility. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp15-019&r=all |
| By: | Verónica Balzarotti (Central Bank of Argentina); Alejandra Anastasi (Central Bank of Argentina) |
| Abstract: | The lack of access to financial services and to credit in particular is an issue in many developing countries. This paper studies the channels through which new borrowers get access to consumer loans and the effect of repayment data distribution both on that access and on subsequent bank switching by borrowers. We represent such dynamics with a simple model that incorporates different types of lenders and heterogeneity among individuals. The model assumptions are validated against data from the Argentinean banking system. The model yields a set of results that are characteristic of emerging markets: a significant share of the population is excluded from credit, including those who self-exclude, and lender type determines different lending conditions. Additionally, the model shows that distributing loan repayment data, by boosting competition for novice borrowers, may increase the share of the population with no access to credit. Following these findings, we advise focusing on improving available information for unbanked individuals, rather than expanding such information for individuals with a loan payment track record. |
| Keywords: | asymmetric information, bank competition, consumer credit, credit access, credit bureau, emerging markets, financial inclusion, information dissemination, poaching |
| JEL: | D82 D83 D43 G14 G21 G23 G28 G29 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:bcr:wpaper:201562&r=all |
| By: | Stacy Carlson; Era Dabla-Norris; Mika Saito; Yu Shi |
| Abstract: | We examine the role of household financial access in determining the extent of risksharing in Nigeria using household-level panel data. We estimate changes in the response of consumption to shocks for households with formal and informal access to finance and those without, both for the country as a whole and for different regions. Our findings suggest that households with financial access who experience an unexpected negative income shock see consumption fall by 15 percentage points less than those without access. This result is mainly driven by households with informal financial access, and by household savings rather than borrowing. Regional variation in risk sharing tends to be significant, suggesting that financial inclusion efforts going forward should have a more regional focus. |
| Keywords: | Africa;Nigeria;Financial services;Household consumption;Household credit;Private savings;Borrowing;Financial access, Risk-Sharing, Household Panel Data, household, savings, households, credit, |
| Date: | 2015–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/169&r=all |
| By: | Dev Nathan (IPC-IG); Govind Kelkar (IPC-IG) |
| Abstract: | In India and other South Asian developing economies there is a high level of under-employment, with large numbers of women who are not engaged in income-earning activities.(…) |
| Keywords: | Very Poor, Women, Entrepreneurship, Social Security, Training, Micro-credit |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:297&r=all |
| By: | Karlan, Dean (Yale University and Innovations for Poverty Action); Thuysbaert, Bram (Yale University and Ghent University) |
| Abstract: | For policy purposes, it is important to understand the relative efficacy of various methods to target the poor. Recently, participatory methods have received particular attention. We examine the effectiveness of a hybrid two-step process that combines a participatory wealth ranking and a verification household survey, relative to two proxy means tests (the Progress out of Poverty Index and a housing index), in Honduras and Peru. The methods we examine perform similarly to one another by various metrics. They all target most accurately in the cases of the poorest and the wealthiest households but perform with mixed results among households in the middle of the distribution. Ultimately, given similar performance, the analysis suggests that costs should be the driving consideration in choosing across methods. |
| JEL: | C81 O12 O20 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:125&r=all |
| By: | David McKenzie; Christopher Woodruff |
| Abstract: | Management has a large effect on the productivity of large firms. But does management matter in micro and small firms, where the majority of the labor force in developing countries works? We develop 26 questions that measure business practices in marketing, stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Mexico, Nigeria and Sri Lanka. We show that variation in business practices explains as much of the variation in outcomes – sales, profits and labor productivity and TFP – in microenterprises as in larger enterprises. Panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth. The effect of business practices is robust to including numerous measures of the owner’s human capital. We find that owners with higher human capital, children of entrepreneurs, and firms with employees employ better business practices. Competition has less robust effects. |
| JEL: | L26 M20 O12 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21505&r=all |
| By: | Mobarak, Ahmed Musfiq (Yale University); Rosenzweig, Mark (Yale University) |
| Abstract: | We estimate the general-equilibrium labor market effects of a large-scale randomized intervention in which we designed and marketed a rainfall index insurance product across three states in India. Marketing agricultural insurance to both cultivators and to agricultural wage laborers allows us to test a general-equilibrium model of wage determination in settings where households supplying labor and households hiring labor face weather risk. Consistent with theoretical predictions, we find that both labor demand and equilibrium wages become more rainfall sensitive when cultivators are offered rainfall insurance, because insurance induces cultivators to switch to riskier, higher-yield production methods. The same insurance contract offered to agricultural laborers smoothes wages across rainfall states by inducing changes in labor supply. Policy simulations based on our estimates suggest that selling insurance only to land-owning cultivators and precluding the landless from the insurance market (which is the current regulatory practice in India and other developing countries), makes wage laborers worse off relative to a situation where insurance does not exist at all. The general-equilibrium analysis reveals that the welfare costs of current regulation are borne by landless laborers, who represent the poorest segment of society and whose risk management options are the most limited. |
| JEL: | O13 O16 O17 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:127&r=all |