nep-mfd New Economics Papers
on Microfinance
Issue of 2016‒05‒28
three papers chosen by
Olivier Dagnelie
Université de Caen

  1. Commercialization and mission drift : evidence from a large Chinese microfinance institution By Jia,Xiangping; Cull,Robert J.; Guo,Pei; Ma,Tao
  2. Integration of Waqf and Islamic Microfinance for Poverty Reduction By Shirazi, Dr. Nasim Shah; Obaidullah, Dr. Mohammed; Haneef, Mohamed Aslam
  3. Regulating innovation in microfinance By Katherine Hunt

  1. By: Jia,Xiangping; Cull,Robert J.; Guo,Pei; Ma,Tao
    Abstract: Front-line loan officers of microfinance institutions are important in acquiring information on potential borrowers and selecting them in accordance with the microfinance institution's mission. This study uses a unique data set on loan officers and their loan portfolios from China's largest nongovernmental organization microfinance institution to test whether officers'personal characteristics affect the size and quality of their loans. The analysis uses a period in which the institution shifted from reliance on government donations and subsidies to commercial sources of funding. Imposing more commercial incentives on loan officers could affect how they balance potentially competing objectives to serve the poor and pursue profitability. The paper finds that loan officers who were formerly farmers or worked in local government were better able to maintain lending to poorer borrowers, without incurring substantially lower repayment rates on their loans. In short, it appears that the career backgrounds of loan officers did play a role in preventing mission drift.
    Keywords: Debt Markets,Access to Finance,Microfinance,Emerging Markets,Bankruptcy and Resolution of Financial Distress
    Date: 2016–05–23
  2. By: Shirazi, Dr. Nasim Shah (The Islamic Research and Teaching Institute (IRTI)); Obaidullah, Dr. Mohammed (The Islamic Research and Teaching Institute (IRTI)); Haneef, Mohamed Aslam (IIUM)
    Abstract: Pakistan has been facing a high incidence of poverty. Despite its persistent efforts to make a dent on poverty, the country never witnessed a systematic reduction in the same. The country has been spending a significant amount on safety nets and social protection programs. Some programs provide direct cash grants and other forms of indirect support to the poor, while microfinance programs provide microcredit, micro savings and micro insurance to the beneficiaries. The government extends full support to the microfinance industry and seeks to provide an enabling environment for its successful operation. As a result, the microfinance industry in Pakistan has been flourishing and steadily enhancing its outreach. However, despite all the efforts, it currently covers just about 10 percent of the market in 2013. In Pakistan, initiatives for Islamic microfinance have been undertaken by a few NGOs and financial institutions. Almost all IMIs function below operational self- sufficiency (OSS) and financial-selfsufficiency (FSS) levels. Most of IMIs are unable to increase their outreach due to the human and financial constraints. They face a constrained supply of funds as well as human resources. This paper posits that the constraints are more apparent than real. Islamic finance must include as part of the formal financial system, its time-tested institution of waqf involving endowment of both financial and real assets for community empowerment. The IMIs should be well aware of how to create and put to use such community assets for the economic and social betterment of the community. The paper sought the opinion of beneficiaries on waqf- Islamic microfinance integrated model and discussed the same with the professionals and practitioners. The beneficiaries were not aware of the main components of the waqf-microfinance integrated model, but professionals and practitioners, invariably supported the integrated model while voicing some concerns that should be considered while formulating policies for the sector
    Keywords: waqf; integration of waqf; Islamic microfinance; poverty; Pakistanreduction; Islamic institutions and poverty reduction; Poverty reduction in the IDB member countries
    Date: 2015–04–07
  3. By: Katherine Hunt
    Keywords: Innovation, Policy, Microfinance, Microfinance Innovation, Microfinance Policy
    JEL: G21
    Date: 2016–04

This nep-mfd issue is ©2016 by 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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