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on Microfinance |
| By: | Suresh De Mel; Craig McIntosh; Ketki Sheth; Christopher Woodruff |
| Abstract: | In developing economies, mobile-linked services have the potential to significantly reduce transaction costs and provide a truly new conduit that could be used to facilitate the flow of savings into banks. We test this premise by introducing a product that permits Sri Lankan households to deposit mobile airtime balances into a formal bank using a new mobile money interface. Using high frequency panel survey data and randomizing access and prices at the individual level, we find that there are moderate percentage increases in savings deposits with the partner institution and formal banks more generally, but no change in overall savings deposits. When the transaction costs are completely removed, only 26 percent of those offered the service use it, and 7 percent use it frequently. Overall, our results imply that transaction costs may not be a significant barrier to increasing deposits, limiting the potential gains of mobile-linked savings products for financial inclusion. |
| JEL: | G21 O12 O16 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25354&r=mfd |
| By: | Thath, Rido |
| Abstract: | Microfinance is considered one of the effective tools in reducing poverty. In the last two decades, Cambodian microfinance industry has made rapid growth in asset, loan and deposit. Microfinance institutions have extended their services to all corner of the country and some have transformed from a donor-assisted NGO program to a full-fledged commercial bank. During the process of the growth of the industry, many borrowers have benefited and been able to move out of poverty while other become over-indebted and lose their asset due to factors such as low financial literacy and the ease to access multiple sources of loan. At the national level, financing microfinance may crowd out the fund for financing small and medium enterprises, and other types of business. Various government response such as the initiative to improve financial literacy and the imposition of interest cap may help reduce the problem of over-indebtedness at the individual borrower level. However, for long run development, they also should consider addressing the trade-off between allocating scarce fund between micro businesses, and small and medium enterprises. |
| Keywords: | microfinance, Cambodia |
| JEL: | G21 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89969&r=mfd |