nep-mfd New Economics Papers
on Microfinance
Issue of 2016‒02‒04
six papers chosen by
Olivier Dagnelie
Université de Caen

  1. What Type of Microfinance Institutions Supply Savings Products? By Anastasia Cozarenco; Marek Hudon; Ariane Szafarz
  2. Microfinance and climate change: threats and opportunities, the case of Brazil’s largest rural MFIs, Agroamigo and Cresol By Rafael Moser; Davide Forcella; Lauro Emilio Gonzales Farias
  3. Rural Microfinance and Climate Change: Geographical Credits Allocation and Vulnerability. An Analysis of Agroamigo in Brazil’s Northeastern States By Davide Forcella; Rafael Moser; Lauro Emilio Gonzales Farias
  5. Are financial cooperatives crowded out by commercial banks in the process of financial sector development? By Anaïs Périlleux; Annabel Vanroose; Bert D’Espallier
  6. Mobile money and household food security in Uganda By Murendo, Conrad; Wollni, Meike

  1. By: Anastasia Cozarenco; Marek Hudon; Ariane Szafarz
    Abstract: Recent evidence shows that the poor desperately need access to savings products. But despite this general consensus, microfinance institutions (MFIs) offering savings products are still under-studied. Using random-effect probit estimation on a dataset of 722 MFIs active over the 2005-2010 period, we try to identify the characteristics of those that collect voluntary savings. Our results suggest that these MFIs have received fewer subsidies than their credit-only counterparts. In other words, subsidies would crowd out micro-savings products, suggesting that donors generate negative externalities on product diversification.
    Keywords: microfinance; subsidies; micro-savings; savings
    JEL: O16 G21 D61 G32 F21
    Date: 2016–01–18
  2. By: Rafael Moser; Davide Forcella; Lauro Emilio Gonzales Farias
    Abstract: This paper reports a cross-case study of the interface between rural microfinance and climate change in Brazil. We use a simple theoretical framework to analyse climate change opportunities and threats of Brazil’s largest rural microfinance institutions, Agroamigo and Cresol, along three main metadimensions: economic, financial and additional services. Our analysis focuses on vulnerability and adaptation to climate change and, to a lesser extent, mitigation. As proxy for climate change effects on clients and institutions, we use the recent droughts and floods affecting some of the areas of operation of these MFIs. We argue that the absence of a combination of climate change strategies in MFIs operating in weather hazard prone regions may result in greater and additional credit risks for their portfolios and a missing opportunity for these players to support their clients better respond to climate change impacts. The case studies under scrutiny corroborate our hypothesis.
    Keywords: Climate Change Adaptation; Climate Change Vulnerability; Agricultural Microfinance; Rural Microfinance; Green Microfinance; Climatic Risk; Credit Risk; Brazil; Agroamigo; Cresol
    JEL: O13 Q14 Q54 G21
    Date: 2016–01–26
  3. By: Davide Forcella; Rafael Moser; Lauro Emilio Gonzales Farias
    Abstract: In this paper we discuss the climate change (CC) vulnerability for rural microfinance. In particular, we seek to assess how the geographical allocation of services influences the vulnerability of microfinance institutions and clients to climate change impacts. As case study we analyse the biggest rural microfinance programme in Brazil: AgroAmigo, that operates in a particularly drought vulnerable area, i.e. the Northeastern region. Accordingly, we implement a correlation analysis between Agroamigo’s geographical credit allocation and local climate change vulnerabilities. The paper shows that the geographical distribution of services increases the climate change vulnerability of the microfinance institution’s (MFI) portfolio, whilst not necessarily offsetting CC vulnerability of clients because fewer credit amounts per person is allocated to the most vulnerable regions. Such results call for a better understanding of the climate change risk and the introduction of tailored strategies for microfinance programmes that could, at once, provide more adapted services to the most vulnerable population while aid manage and/or mitigate potential climatic risks of MFI’s portfolio, in particular those operating in hazard prone areas.
    Keywords: Climate Change Adaptation; Climate Change Vulnerability; Geographical Credits Allocation; Agricultural Microfinance; Rural Microfinance; Green Microfinance; Climatic Risk; Credit Risk; Brazil; Agroamigo
    JEL: O13 Q14 Q54 G21
    Date: 2016–01–27
  4. By: B. Madhusudhana
    Abstract: The society is male dominated and finance is also controlled by men. When financial freedom is detained from women then their social and political freedom are also detained. Governments around the world gave many social programs especially for women to develop but male dominated society has given a check in reaching these programs to women. The major hurdles for any women to develop economically are education, participation in economic activity and finally return. Micro-finance through SHGs made a small change in improving financial condition of the women. The sample respondents of the present empirical study accepted that their financial condition is improved but it is not enough. Even after becoming the members of SHGs, women could not affordable to durables. They exercised household decisions in festivals and purchases. It may be concluded that women require encouragement at family level and opportunities at society level in order to develop economically. Key words: SHGs, microfinance, women empowerment and poverty alleviation
    Date: 2015–09
  5. By: Anaïs Périlleux (UNIVERSITE CATHOLIQUE DE LOUVAIN, Centre Interdisciplinaire de Recherche Travail, État et Société (CIRTES), Institut de Recherches Economiques et Sociales (IRES) and CERMi); Annabel Vanroose (Université libre de Bruxelles (ULB), CERMi and Vrije Universiteit Brussel (VUB)); Bert D’Espallier (KU LEUVEN, CERMi)
    Abstract: This paper investigates whether financial cooperatives are crowded out by commercial banks in the process of financial sector development. We use a self-constructed database (1990-2011) of financial cooperatives in 55 developing countries. Our empirical results are threefold. First, financial cooperatives tend to reach more members in countries where the commercial banking sector is weak. This validates their role as a market failure solution. Second, in the process of commercial bank expansion, financial cooperatives run the risk of being crowded out. Third, financial cooperatives seem to benefit from some kind of bank presence, especially as far as savings mobilization is concerned.
    Keywords: Financial cooperatives, Microfinance, Competition, Crowding out, Financial Sector Development
    JEL: G21 L31 O16 P13
    Date: 2016–01–06
  6. By: Murendo, Conrad; Wollni, Meike
    Abstract: Despite the fact that the use of mobile money technology has been spreading rapidly in developing countries, empirical studies on the broader welfare effects of the technology on rural households are still limited. Using household survey data, we analyse the effect of mobile money on household food security in Uganda. Unlike previous studies that rely on a single measure of food security, we measure food security using two indicators – a food insecurity index and food expenditures. To account for selection bias in mobile money use, we estimate treatment effects and instrumental variables regressions. Our results indicate that the use of mobile money per se as well as the volumes transferred are associated with a reduction in food insecurity. Furthermore, the use, frequency of use, and volumes of mobile money transferred are associated with increases in food expenditures. Policy interventions and strategies aiming to improve household food security should consider the promotion of mobile money among rural households in Uganda and other developing countries as a promising instrument.
    Keywords: mobile money, food security, households, Uganda, Consumer/Household Economics, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, G29, I31, O16, O33,
    Date: 2016–01

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