nep-mfd New Economics Papers
on Microfinance
Issue of 2015‒11‒21
three papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Productivity and Efficiency Analysis of Microfinance Institutions (MFIS) in Bangladesh By Bairagi, Subir
  2. Microinsurance decisions: Gendered evidence from rural Bangladesh: By Clarke, Daniel J.; Kumar, Neha

  1. By: Bairagi, Subir
    Abstract: This paper estimates productivity and efficiency of ten major microfinance institutions (MFIs) in Bangladesh using the stochastic frontier output distance function approach. Cobb-Douglas specification is applied with two outputs and four inputs for the period 2003-2011. Analysis reveals that on an average the rate of total factor productivity (TFP) growth in MFIs was 2.6%, mostly due to technological progress (2.5%), while the average efficiency change was only 0.1%. The mean efficiency of microfinance firms was 0.765, which implies that MFIs could have produced 23.5% more with the current levels of input bundles if they had been fully efficient. The determinants of firms’ inefficiencies are cost per borrower and operational self-sufficiency, significant at the 1% level. The smaller MFIs (RDRS, Shakti, SSS, and JCF) define better frontiers than others, while bigger MFIs (BRAC, ASA, and GB) have been catching up faster than others.
    Keywords: Stochastic frontier output distance, total factor productivity (TFP), microfinance institutions (MFIs)
    JEL: G21 Q12 Q14
    Date: 2014–12
  2. By: Clarke, Daniel J.; Kumar, Neha
    Abstract: Most index-based insurance products have been developed without giving explicit attention to gender. However, there is ample evidence that shocks affect men and women differently and that they allocate resources in different ways. In Bangladesh it is often assumed that women are less involved in agriculture, and therefore agricultural insurance might not be of interest to rural women. However, this assumption has not been tested in the field. This paper draws from a field research experiment to examine the gendered aspects of willingness to pay for index-based insurance in Bangladesh. Participants were presented with risky lotteries and a specific insurance contract and were asked to choose how much (if any) of the insurance they wanted to buy at a given price. The probability structure (whether the risk was catastrophic or moderate and whether there was high or low basis risk) varied within sessions. The price of the insurance varied across sessions. Each participant was also administered a short questionnaire, which collected information on demographic characteristics, risk preferences, agricultural risks, knowledge of insurance products, and asset ownership. Ninety-seven percent of the participants in the study decided to buy agricultural insurance, with no significant differences between men and women, even though women are less involved in agricultural decisionmaking. We find a small decrease in take-up for the low-probability event, driven by the women in the sample. When we examine the number of units bought, we find that men were likely to buy more units than women. Total wealth, as captured by total land owned, had no effect on units bought. However, among women total wealth mattered and had a positive correlation. Finally, we find that women had less education and lower financial literacy than their male counterparts, as well as less background in understanding agricultural risk. This placed them at a disadvantage when making insurance purchase decisions.
    Keywords: gender, women, insurance, risk, finance, index insurance, risk preference, economic shocks, Willingness to pay,
    Date: 2015
  3. By: Quintín Quilez Pedro
    Abstract: Este texto cuestiona algunos diagnósticos realizados por prestigiosas agencias de desarrollo económico –y repetidos por los medios de comunicación–, acerca de la incapacidad de los colombianos para organizar su futuro económico. Para ello, se recurre como contra-ejemplo empírico al caso de las cadenas, un tipo de Asociación Rotativa de Ahorro y Crédito o RoSCA. A partir de los datos de una exploración adelantada por medio de una pequeña encuesta en Cali, se sugieren vías de interpretación insistiendo en que la capacidad de planificación y organización económica se encuentra ya presente entre nuestros conciudadanos.
    Keywords: Desarrollo económico, planificación, redes, confianza, RoSCA
    Date: 2015–10–30

This nep-mfd issue is ©2015 by Aastha Pudasainee and Olivier Dagnelie. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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