nep-mfd New Economics Papers
on Microfinance
Issue of 2018‒09‒17
three papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Financial Access Under the Microscope By Camelia Minoiu
  2. A new European microfinance panel data set: The European Microfinance Network survey 2006-2015 By Fabrizio Botti; Marcella Corsi; Giulia Zacchia
  3. Just a Few Seeds More: Value of Network Information for Diffusion By Akbarpour, Mohammad; Malladi, Suraj; Saberi, Amin

  1. By: Camelia Minoiu
    Abstract: We examine the impact of a large-scale microcredit expansion program on financial access and the transition of previously unbanked borrowers to commercial banks. Administrative data on the universe of loans to individuals show that the program improved access to credit, especially in underdeveloped areas. A sizeable share of first-time borrowers who need a second loan switch from microfinance institutions to commercial banks, which cream-skim low-risk borrowers and grant them larger, cheaper, and longer-term loans. These borrowers are not riskier than those already at commercial banks. The microfinance sector, together with well-functioning credit reference bureaus, help mitigate information frictions in credit markets.
    Keywords: Financial inclusion, microfinance, loan expansion programs, credit reference bureau
    JEL: G21 O12 O55
    Date: 2018–09
  2. By: Fabrizio Botti; Marcella Corsi; Giulia Zacchia
    Abstract: Since 2004, with the aim to provide a consistent picture of the European microfinance sector, the European Microfinance Network (EMN) carried out, on a biennial basis, a survey of microfinance institutions (MFIs) in Europe. The MFIs surveyed by EMN self-report data mainly about their mission, target, social and financial impact; an overview of the main results of these surveys are reported on EMN overview publications1. The surveys covered a growing and changing group of participants in terms of institutional types and geographical coverage (from 394 microlenders from 16 European countries in 2006 to 195 institutions from 29 countries in 2014) through a survey questionnaire subject to adjustments throughout the different editions.The last survey (run in 2016 with reference to the years 2014-2015) has been jointly managed by the EMN and the Microfinance Center (MFC2) and it included a wider participation of Eastern European MFIs members of the MFC.The significant volatility of observed institutions, questionnaire structure, and variables definition undermined so far the quality and comparability of collected data and prevented to conduct a comprehensive analysis of European MFIs’ performance through time.
    Keywords: Overview survey
    Date: 2018
  3. By: Akbarpour, Mohammad (Stanford U); Malladi, Suraj (Stanford U); Saberi, Amin (Stanford U)
    Abstract: Identifying the optimal set of individuals to first receive information ('seeds') in a social network is a widely-studied question in many settings, such as the diffusion of information, microfinance programs, and new technologies. Numerous studies have proposed various network-centrality based heuristics to choose seeds in a way that is likely to boost diffusion. Here we show that, for some frequently studied diffusion processes, randomly seeding s plus x individuals can prompt a larger cascade than optimally targeting the best s individuals, for a small x. We prove our results for large classes of random networks, but also show that they hold in simulations over several real-world networks. This suggests that the returns to collecting and analyzing network information to identify the optimal seeds may not be economically significant. Given these findings, practitioners interested in communicating a message to a large number of people may wish to compare the cost of network-based targeting to that of slightly expanding initial outreach.
    JEL: D83 D85 O12 Z13
    Date: 2018–04

This nep-mfd issue is ©2018 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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