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on Microfinance |
| By: | Renaud Bourlès (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille 2 - Université Paul Cézanne - Aix-Marseille 3 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Anastasia Cozarenco (CERMi - Centre for European Research in Microfinance, Montpellier Business School, Montpellier Research in Management) |
| Abstract: | This article examines the link between entrepreneurial motivation and business performance in the French microfinance context. Using hand-collected data on business microcredits from a Microfinance Institution (MFI), we provide an indirect measure of entrepreneurial success through loan repayment performance. Controlling for the endogeneity of entrepreneurial motivation in a bivariate probit model, we find that "necessity entrepreneurs" are more likely to have difficulty repaying their microcredits than "opportunity entrepreneurs". However, type of motivation does not appear to make a difference to business survival. We build a stylized model to develop formal arguments supporting this outcome. We test for the robustness of our results using parametric duration models, and show that necessity entrepreneurs experience difficulties in loan repayment earlier than their opportunity counterparts, corroborating our initial findings. |
| Keywords: | opportunity and necessity entrepreneurs,business microcredit,loan repayment,business survival |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01429864&r=mfd |
| By: | Hussain, A.K.M. Ghulam; Nargis, Nigar; Ashiquzzaman, S.M.; Khalil, Fahad |
| Abstract: | Microcredit program, originating in Bangladesh in the late 1970s, has played an important role to meet the financing needs of the impoverished communities around the world. While the successes and failures of microcredit in lifting the poor out of poverty have been recorded in a wide array of literature, the employment outcome of participating in a microcredit program as a pathway to poverty reduction has been studied much less. Using two waves of longitudinal data on over 2000 households, we examine the employment impact of microcredit program in Bangladesh during 1998-2004. The longitudinal nature of data allows us fixed effects estimation of the effect of microcredit program participation on self-employment hours and household labor income isolating the biases that may result from non-random program placement, censoring in self-employment work hours and income data, and non-random sample selection of households or individuals as participants who already have entrepreneurial skills or pre-existing household conditions favourable to self-employment activities. The fixed effects estimate shows that households that participate in microcredit program work on average 245 hours longer in self-employment activities and earn 9.4% higher labor income than non-participant households. These extra hours are equivalent to around 7 weeks of employment for a person. The income effect of microcredit program participation is more discernible on household labor income than on total household income due to lack of direct link of microcredit program with non-labor income sources such as remittance. The participating households at the bottom of the income distribution appear to have gained more than those at the upper end suggesting equalizing effect of microcredit program participation over and above the positive effect on employment and income growth. Thus microcredit program in Bangladesh has succeeded in providing employment generating capacities to participants and raised the potential for income growth that contributed to poverty reduction. |
| Keywords: | microcredit,self-employment,labor income,poverty |
| JEL: | I32 J21 J22 J43 J46 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:59&r=mfd |
| By: | Tho Pham; Oleksandr Talavera |
| Abstract: | This paper examines the relationship between gender, social capital, and access to finance of micro, small, and medium enterprises in the manufacturing sector in Viet Nam. Our dataset is from the 2011, 2013, and 2015 waves of the Micro, Small, and Medium Enterprise Survey in Viet Nam. Using the Heckman technique to control for sample selection bias, the data do not provide evidence for discrimination against female-owned enterprises in the formal lending market. Specifically, female entrepreneurs have a higher probability of getting a loan and they pay lower interest rates in comparison with male entrepreneurs. No discrimination in formal credit markets may arise from the preference for informal loans over formal loans—that is, entrepreneurs tend to borrow informal loans before applying for formal ones. Further analysis shows that social capital could facilitate loan applications: firms that have a closer relationship with government officials and other business people can get loans of longer duration. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-67&r=mfd |
| By: | Nathan Fiala (University of Connecticut) |
| Abstract: | I present evidence that intra-household decision making affects business investment decisions and household welfare. I interact the results from a behavioral experiment that allows spouses to hide money from each other with an experiment that delivered capital to business owners in Uganda. Businesses were randomly selected to receive capital through a loan or grant, or capital paired with training. I find evidence that the grant with training treatment had medium-term economic impacts when given to men, but there are no effects from the other treatments for men or women. I also find that the loan with training treatment had impacts on the income of spouses of women, though women do not know about these effects. The results from the incentivized behavioral game correlate significantly with household economic outcomes: men who do not hide money from their wives show higher economic outcomes from the treatments, while those who hide money show a negative change relative to a control group. The opposite is the case for women: women who hide money from their husbands show increased economic outcomes, while those who do not hide money see a decrease in outcomes. The results are consistent with strong female household constraints where women have little control over resources in the family and so hiding money is the only way to keep control of it. Men have less fear of losing control of money in the household, and so those that hide money likely have serious household issues that lead to significant negative investment behavior. The results help to explain why women with existing enterprises have performed so poorly in previous capital experiments and why researchers have failed to find impacts from microfinance. |
| Keywords: | Economic development; microenterprises; microfinance; cash grants; entrepreneurship training; credit constraints |
| JEL: | O12 O16 C93 J16 L26 M53 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2017-05&r=mfd |
| By: | Warner Woodworth (NGOs Worldwide) |
| Abstract: | Today's students in business schools are increasingly passionate about using their skills to change the world. This paper provides an opportunity to gain a vision for how professors may "juice" their classes by integrating management theory with real world problems. There are a growing number of colleges that seek practical and meaningful ways to get students involved in community service. Increasingly university students want the praxis of learning, in other words they seek the conceptual plus the practical. Often, these ideas are referred to as service learning or action research. They usually consist of a couple months of activities during the semester as pro bono consultants to local government agencies, nonprofit organizations, and so forth. The essence of this paper is the establishing of a new start-up venture with students that continues with the involvement of other students in the future, well beyond a given semester. The idea was to create an ongoing micro-enterprise program that would generates superb learning for current students, and build further in the future from one class to another. |
| Keywords: | Teaching, Practice, Microfinance, MBA, Social Entrepreneurship |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:4707403&r=mfd |
| By: | McKenzie, David (World Bank); Puerto, Olga Susana (Youth Employment Network (UN, ILO, World Bank)) |
| Abstract: | A common concern with efforts to directly help some small businesses to grow is that their growth comes at the expense of their unassisted competitors. We test this possibility using a two-stage randomized experiment in Kenya which randomizes business training at the market level, and then within markets to selected businesses. Three years after training, the treated businesses are selling more, earn higher profits, and their owners have higher well-being. There is no evidence of negative spillovers on the competing businesses, and the markets as a whole appear to have grown in terms of number of customers and sales volumes. This market growth appears to come from enhanced customer service and new product introduction, generating more customers and more sales from existing customers. As a result, business growth in underdeveloped markets is possible without taking sales away from non-treated businesses. |
| Keywords: | business training, spillovers, microenterprise, market development |
| JEL: | O12 O17 J16 L26 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10615&r=mfd |
| By: | Simplice Asongu (Yaoundé/Cameroun); Ndemaze Asongu (Yaoundé/Cameroun) |
| Abstract: | Purpose- We respond to some challenges in the transition to Sustainable Development Goals by examining the correlations between mobile and inclusive development (quality of growth, poverty and inequality) in 93 developing countries for the year 2011. Design/methodology/approach- Mobile money service entails: ‘mobile used to pay bills’ and ‘mobile used to receive/send money’. Interactive Ordinary Least Squares are employed. Findings- The following findings are established. First, increasing use of the mobile phones to pay bills: is positively linked to ‘quality of growth’ in lower-middle income countries (LMIC) and negatively correlated with inequality in Latin American countries (LA). Second, growing use of mobile phones to send/receive money is negatively associated with poverty in Asia and Pacific (AP) and Central and Eastern Europe (CEE). Originality/value- Macroeconomic data on mobile money service is scarce. No study to the best of our knowledge has used this macroeconomic mobile money service data before. |
| Keywords: | Mobile money services, Quality of growth, poverty, inequality |
| JEL: | G20 O40 I10 I20 I32 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:17/011&r=mfd |