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on Microfinance |
| By: | Jacinta C. Nwachukwu (Coventry University, UK); Aqsa Aziz (Coventry University, UK); Uchenna Tony-Okeke (Coventry University, UK); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | This study compares the responsiveness of microcredit interest rates to age, scale of lending and organisational charter. It uses an unbalanced panel of 300 MFIs from 107 developing countries from 2005 to 2015. Three key trends emerge from the results of a 2SLS regression. First, the adoption of formal microbanking practices raises interest rates compared with other forms of microlending. Second, large scale lending lowers interest rates only for those MFIs that already hold legal banking status. Third, age of operation in excess of eight years exerts a negative impact on interest rates, regardless of scale and charter type of MFI. Collectively, our results indicate that policies which incentivise mature MFIs to share their knowledge will be more effective in helping the nascent institutions to overcome their cost disadvantages compared with reforms to transform them into licensed banks. For MFIs which already hold permits to operate as banks, initiatives to increase loan sizes are key strategic pricing decisions, irrespective of the institution’s age. This study is original in its differentiation of the impact on interest rates of regulations which promote formal banking principles, credit market extension vis-Ã -vis knowledge sharing between mature and nascent MFIs. |
| Keywords: | Microfinance, microbanks, non-bank financial institutions |
| JEL: | G21 G23 G28 E43 N20 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/006&r=all |
| By: | McLaughlin, Eoin; Pecchenino, Rowena |
| Abstract: | In the decade before the famine, Ireland experienced a boom in Microfinance Institutions (MFIs). This paper analyses the motivations of MFI proponents and practitioners, and finds evidence linking the boom in MFIs with the introduction of the poor law in 1838. Many contemporary writers saw microfinance as a complex tax avoidance/reduction scheme that could lessen the burden on rate payers by helping the poor help themselves. The link between MFIs and the poor law is confirmed by an econometric analysis of MFIs at the level of the poor law union. |
| Keywords: | microfinance,inequality,development,Ireland |
| JEL: | G21 H75 I38 N23 N33 N83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eabhps:1901&r=all |
| By: | Luc Jacolin; Massil Keneck; Alphonse Noah |
| Abstract: | This paper investigates the impact of mobile financial services - MFS (mobile money, and mobile credit and savings) on the informal sector. Using both parametric and non-parametric methods on panel data from 101 emerging and developing countries over the period 2000-15, we find that MFS negatively affect the size of the informal sector. According to estimates derived from propensity score matching, MFS adoption decreases the informal sector size in a range of 2.4 – 4.3 percentage points of GDP. These formalization effects may stem from different possible transmission channels: improvement in credit access, increase in the productivity/profitability of informal firms attenuating subsistence constraints typical of entrepreneurship in the informal sector, as well as possible induced growth of firms already in the formal sector. The robustness of these results is supported by the use of an alternative estimation approach (instrumental variables). These findings lay the groundwork for the scarce literature on the macroeconomic impact of mobile financial services, a major dimension of the growing drive towards economic digitalization transiting through industry-level MW. |
| Keywords: | Mobile financial services, Mobile money, Financial innovation, Digitalization, Informal sector, Developing countries. |
| JEL: | C26 E26 O33 G29 L96 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:721&r=all |
| By: | SAM, Vichet |
| Abstract: | This article investigates the barriers to formal financial inclusion in Cambodia, focusing on saving and credit strands. We propose the multinomial logit model, allowing to distinguish the outcome variable into three categories: Formal inclusion, Informal inclusion and Financial exclusion. We apply this model to the FinScope survey data conducted in late 2015, which represents the adult population in Cambodia. Results suggest that the trust to financial institutions, the financial literacy, the distance to banks or MFI, the lack of documentation and the service costs are the main obstacles, but these barriers affect the probability of using formal financial services differently according to the types of financial services (saving or credit). Gender, marital status, education, income, access to media and information, the use of mobile phone with the access to the Internet and the household size are also found to be the key determinants. |
| Keywords: | Determinants and Barriers to financial inclusion, Developing country, Multinomial logit model. |
| JEL: | G21 G28 |
| Date: | 2019–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94000&r=all |