nep-mfd New Economics Papers
on Microfinance
Issue of 2016‒03‒23
five papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Commercialization and the Decline of Joint Liability Microcredit By Quidt, Jonathan de; Fetzer, Thiemo; Ghatak, Maitreesh
  2. Making Money Work: Unconditional cash transfers allow women to save and re-invest in rural Zambia By Luisa Natali; Sudhanshu Handa; David Seidenfeld; Gelson Tembo; Amber Peterman; UNICEF Office of Research - Innocenti
  3. Performance of microfinance institutions in achieving the poverty outreach and financial sustainability: When age and size matter? By Wijesiri, Mahinda; Yaron, Jacob; Meoli, Michele
  4. Public vs. Private Mental Accounts: Experimental Evidence from Savings Groups in Colombia By Luz Magdalena Salas
  5. Les indicateurs de performance sociale By Valérie Pallas-Saltiel; Evelyne Rousselet

  1. By: Quidt, Jonathan de (Institute for International Economic Studies); Fetzer, Thiemo (University of Warwick); Ghatak, Maitreesh (London School of Economics)
    Abstract: Numerous authors point to a decline in joint liability microcredit, rise in individual liability lending. But empirical evidence is lacking, and there have been no rigorous analyses of possible causes. We first show using the well-known MIX Market dataset that there is evidence for a decline. Second, we show theoretically that commercialization-an increase in competition and a shift from non-profit to for-profit lending (both of which are present in the data)–drives lenders to reduce their use of joint liability loan contracts. Third, we test the model’s key predictions, and find support for them in the data.
    Keywords: microfinance; joint liability; commercialization; market structure JEL Classification: G21, O12, O16
    Date: 2016
  2. By: Luisa Natali; Sudhanshu Handa; David Seidenfeld; Gelson Tembo; Amber Peterman; UNICEF Office of Research - Innocenti
    Abstract: Savings play a crucial role in faciliating investment in income-generating activities and the pathway out of poverty for low-income households in developing settings. Yet, there is little evidence of successful programmes that increase savings, particularly those that are simultaneously cost effective, scaleable and address gender inequalities. This paper examines the impact of the Government of Zambia’s Child Grant Programme (CGP), an unconditional cash transfer targeted to women in households with young children, on women’s savings and participation in non-farm enterprises. Findings show that the CGP enabled poor women to save more cash and that the impact is larger for women who had lower decision-making power at baseline. The results support the proposition that cash transfers have the potential for long-term sustainable improvements in women’s financial position and household well-being by promoting savings and facilitating productive investments among low-income rural households.
    Keywords: cash transfers; savings; small farms; small scale enterprises; social benefits; women in development; women's empowerment; zambia;
    JEL: O22
    Date: 2016
  3. By: Wijesiri, Mahinda; Yaron, Jacob; Meoli, Michele
    Abstract: Using a two-stage DEA bootstrapped metafrontier approach, we investigate the effects of age and size on efficiency estimates of microfinance institutions (MFIs). In the first-stage, we use a metafrontier model combining with DEA bootstrapped procedure to obtain statistically robust and comparable efficiencies. In the second-stage, we employ a bootstrapped truncated regression to account for the impact of exogenous factors on both dimensions of efficiency. Results highlight the importance of model specification for MFIs operating in different geographical regions. Moreover, we find that although older MFIs perform better than younger ones in terms of achieving financial results, they are relatively inefficient in achieving outreach objectives. We also document that MFI size matters: larger MFIs tend to have higher financial and outreach efficiency.
    Keywords: Data envelopment analysis; Metafrontier; Bootstrap; Efficiency; Microfinance
    JEL: C14 C15 C18 G2 G23 O16
    Date: 2015
  4. By: Luz Magdalena Salas
    Abstract: I study whether modifications to the framing of a commitment savings product affects savings accumulations and other poverty-linked outcomes for low-income individuals in newly-formed Village Savings and Loan Associations (VSLAs) in Colombia. The experiment tests whether behavioral responses vary depending on whether subjects are led to label and create ‘mental savings accounts’ in private versus public ways. Individuals in the private labeling treatment stated accumulation targets and earmarked savings for a particular purpose, but this was shared only privately with a member of the research team. Individuals in the public labeling treatment received the same intervention but publicly revealed and announced their goals to other members of their savings group. The average treatment effect of the public-labeling intervention are very strong and significant. Savings accumulations increased by an average of 35% and savings goals were 8.5% more likely to be reached in comparison to those untreated. Further explorations strongly suggest evidence of differentiated behavioral responses of individuals in the private-labeling treatment group: private commitment to a savings goal is more effective for individuals who, after random assignment but prior to the intervention, were less constrained by extant economic circumstances and institutional barriers. The analysis and interpretation of results was enriched by mixed methods for data collection: households’ survey data, administrative records and qualitative data from focus groups discussions.
    Keywords: Behavioral economics, microfinance, randomized controlled trial, savings, mental accounting, labeling, self-control.
    JEL: C93 D03 D14 D91 O16
    Date: 2015–11–17
  5. By: Valérie Pallas-Saltiel (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Evelyne Rousselet (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: La microfinance repose sur la distribution de produits et services financiers à des individus exclus du système bancaire classique. L'étude de cas porte sur la performance des organisations qui en sont les acteurs majeurs – les Institutions de Microfinance-et l'analyse de la pertinence des indicateurs de performance sociale proposés par la Social Performance Task Force (S.P.T.F), un groupe de travail international réunissant les principales parties prenantes du secteur.
    Keywords: parties prenantes,performance sociale,microfinance,indicateurs de performance
    Date: 2015

This nep-mfd issue is ©2016 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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