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on Microfinance |
| By: | Apoorv Gupta (Northwestern University); Jacopo Ponticelli (Northwestern University & CEPR); Andrea Tesei (Queen Mary University of London, CEPR, CEP (LSE) & CESifo) |
| Abstract: | Farmers in developing countries often lack access to timely and reliable information about modern technologies that are essential to improve agricultural productivity. The recent diffusion of mobile phones has the potential to overcome these barriers by making information available to those previously unconnected. In this paper we study the effect of mobile phone network expansion in rural India on adoption of high yielding variety seeds and chemical fertilizers. Our empirical strategy exploits geographical variation in the construction of mobile phone towers under a large government program targeting areas without existing coverage. To explore the role of mobile phones in mitigating information frictions we analyze the content of 1.4 million phone calls made by farmers to a major call center for agricultural advice. Farmers seek advice on which seed varieties and fertilizers better meet their needs and how to use them. We find that areas receiving mobile phone coverage experience higher adoption of these technologies. We also observe that farmers are often unaware of the eligibility criteria and loan terms offered by subsidized credit programs. Consistently, we find that areas receiving mobile phone coverage experience higher take-up of agricultural credit. |
| Keywords: | India, Agriculture, HYV Seeds, Credit Card |
| JEL: | G21 Q16 E51 |
| Date: | 2019–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:892&r=all |
| By: | Chen, Joyce; Flatnes, Jon |
| Abstract: | We explore the impact of flooding on migration in Bangladesh and examine whether migration responses are mitigated by access to credit. Using unique data from a household survey conducted in rural Bangladesh shortly after the 1998 flood, we estimate the effect of flooding on both permanent and temporary migration. We utilize a difference-in-differences approach that relies on randomized early access to microfinance. Flood exposure is based on village-level reports of flood intensity, which can be treated as exogenous to individual households. We find that flooding led to increased temporary migration, with no effect on permanent migration. Moreover, access to credit several years earlier fully mitigates the migration effect, suggesting that credit access allows farmers to cope with severe climate events without having to migrate. Our study thus provides an important contribution to the broader literature on climate change adaptation, by demonstrating that relieving credit constraints could enhance local livelihood strategies during environmental hazards, without deterring gradual permanent migration away from vulnerable areas. |
| Keywords: | Community/Rural/Urban Development, Environmental Economics and Policy |
| Date: | 2019–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa20:296671&r=all |
| By: | Hery Purnomo Tunggal (Master of Applied Economics, Padjadjaran University); Tati Suhartati Joesron (Master of Applied Economics, Padjadjaran University) |
| Abstract: | Indonesian small and micro industries (SMIs) grow rapidly, followed by the shifting of the agricultural sector to manufacturing sector. However, its low contribution to national economy indicates there are encountered problems of productivity and efficiency. The goal of this study is analyzing technical efficiency of Indonesian SMIs categorized by size and five subsectors classified by Indonesia Standard Industrial Classification (ISIC). This study examines crosssectional data from survey of Indonesian small and micro industries (VIMK) in 2014 estimated statistically using Stochastic Frontier Analysis (SFA). The results show that SMIs are labor intensive business, yet it faces diseconomies of scale. Hence, the role of capital increase should not be ignored. The key findings are mainly female ownership in the food processing industry positively contribute to efficiency improvement, the greater the sales the more efficient the business will function, younger entrepreneur is more efficient to manage several subsectors and access to financial sources positively contribute to efficiency improvement in clothing industry. Empowerment strategy to improve technical efficiency of SMIs should emphasis on intensively vocational/entrepreneurial training particularly for female and younger entrepreneurs, promotion for network building activity and deregulating microcredit scheme, especially for clothing industry. |
| Keywords: | small and micro industries, efficiency, stochastic frontier analysis |
| JEL: | L0 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201903&r=all |
| By: | Hanna Fromell (University of Groningen); Daniele Nosenzo (University of Nottingham, School of Economics & Luxembourg Institute of Socio-Economic Research (LISER)); Trudy Owens (University of Nottingham, School of Economics); Fabio Tufano (University of Nottingham, School of Economics) |
| Abstract: | We measure the social norms of sharing income with kin and neighbors in villages in Kenya. We find a plurality of norms: from a strict norm prohibiting wealth accumulation to a norm facilitating saving. Several individual and social network characteristics predict the norms upheld; the pro-saving norm becomes majoritarian when an individual can conceal their income from kin and neighbors. Whether income secrecy facilitates savings depends on the type of norm individuals uphold: stricter norm supporters are helped by secrecy, pro-saving norm supporters are harmed. This highlights the importance of measuring social norms when devising pro-saving policy interventions. |
| Keywords: | Sharing norms; forced solidarity; social pressure; savings; social norms; KrupkaWeber method; lab-in-the-field experiment |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2019-12&r=all |
| By: | Kelly Jones; Erick Gong |
| Abstract: | For the vulnerable, even small shocks can have significant short-and long-term impacts. Beneficial shock-coping mechanisms are not widely available in sub-Saharan Africa. We test whether individual precautionary savings can reduce a shock-coping behavior common in SSA that has negative spillovers: transactional sex. Among a set of vulnerable women, we randomly assigned an intervention that promoted savings in a mobile banking account labeled for goals and emergency expenses. We find that the intervention led to an increase in total mobile savings, reductions in transactional sex as a risk-coping response, and a decrease in symptoms of sexually transmitted infections. Changes are sustained in the medium-term. |
| Keywords: | Shock-coping; Savings; Sexual behavior; Kenya; Africa |
| JEL: | O12 D14 I15 J16 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2019-06&r=all |
| By: | Pelletier, Adeline; Khavul, Susanna; Estrin, Saul |
| Abstract: | Mobile money is a financial innovation that provides transfers, payments, and other financial services at a low or zero cost to individuals in developing countries where banking and capital markets are deficient and financial inclusion is low. We use transaction costs and institutional theories to explain the growth and impact of mobile money. Having developed a new archival dataset that tracks mobile money deployment across 90 emerging economies during 16 years between 2000 and 2015, we address the question of relative economic impact of the banking and telecoms sectors in the provision of mobile money. We show that telecom groups and not banks are more likely to launch mobile money in countries where legal rights are weaker and credit information less prevalent. However, it is when mobile money is offered via a banking channel that the spillover effects on the economy are greater. Findings have significant implications for policy and strategy. |
| JEL: | G21 M13 O33 |
| Date: | 2019–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:101150&r=all |
| By: | Immanuel Lampe; Daniel Würtenberger |
| Abstract: | This work analyzes if reference dependence and loss aversion can explainthe puzzling low adoption rates of rainfall index insurance. We present a model that predicts the impact of loss aversion on index insurance demand to vary with different levels of insurance understanding. Index insurance demand of farmers who are unaware of the loss-hedging benefit that insurance provides decreases with loss aversion. In contrast, insurance demand of farmers who are aware of the loss-hedging benefit increases with loss aversion. The model further predicts that farmers who are unaware of the loss-hedging benefit will not demand an even highly subsidized index insurance. Using data from a randomized controlled trial involving a sample of Indian farmers we provide empirical support for our core conjecture that insurance understanding mitigates the negative impact of loss aversion on index insurance adoption. |
| Keywords: | Prospect Theory, Reference Dependence, Microinsurance, Farm Household |
| JEL: | D91 G22 Q12 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2019:07&r=all |