nep-mfd New Economics Papers
on Microfinance
Issue of 2020‒02‒17
three papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Adopting mobile money: Evidence from an experiment in rural Africa By Catia Batista; Pedro C. Vicente
  2. Rural financial intermediation and poverty reduction in Ghana: A micro-level analysis By Danquah Michael; Iddrisu Abdul; Ohemeng Williams; Barimah Alfred
  3. Social and financial performance of Islamic and conventional microfinance institutions: Comparative Study in Indonesia By Zaied, Maher; Maktouf, Samir

  1. By: Catia Batista; Pedro C. Vicente
    Abstract: Who uses mobile money? And what is mobile money used for? This paper describes the mobile money adoption patterns following the experimental introduction of mobile money services for the first time in rural areas of Southern Mozambique. In particular, we examine the individual characteristics of early and late adopters, as well as their mobile money usage patterns. For this purpose, we use a combination of administrative and household survey data to characterize the adoption of mobile money services in the three years following their initial introduction. We find that a large proportion of the individuals who were offered mobile money services adopted this technology. These users of mobile money (and early adopters in particular) are more educated than non-users, and they also are more likely to already hold a bank account. Positive-self-selection into mobile money usage raises the question of whether mobile money is an effective tool for financial inclusion.
    Keywords: Fintech, Mobile money, Technology adoption, Self-selection, Financial inclusion, Financial deepening, Mozambique, Africa.
    Date: 2020
  2. By: Danquah Michael; Iddrisu Abdul; Ohemeng Williams; Barimah Alfred
    Abstract: The financial sector in rural areas, where most of the poor people in sub-Saharan Africa are found, has transformed massively in recent times, notably through the increased penetration of several types of rural financial intermediaries in addition to rural and community banks and microfinance institutions.Using recent household survey data, we ascertain the access of rural populations to various types of financial services, and the influence of rural financial intermediation on poverty reduction, in Ghana. By accounting for the potential endogeneity of access to financial services, we show that rural households with access to basic financial services are significantly more likely to be non-poor than those without such access.In order to more sustainably tackle the goal, highlighted in the Sustainable Development Goals, of eliminating global hunger or extreme poverty, the poor must be allowed to obtain meaningful access to financial services through the design of efficient pro-poor financial products.
    Date: 2020
  3. By: Zaied, Maher; Maktouf, Samir
    Abstract: The microfinance initiative has evolved over the past four decades, as important mechanisms for reducing poverty. There is strong evidence, however, to suggest that increasing their financial viability often hampers their ability to reach the poorest of the poor. This article aims to identify the degree of performance of Islamic and conventional microfinance institutions in Indonesia. To answer the problematic of our work, we also apply the methodology of Data Envelopment Analysis (DEA), linear analysis of the efficiency according to the non-parametric programming to evaluate the performance of the MFIs. Based on data collected from a follow-up of the 120 Indonesian MFIs over a quarterly period for five years, over the 2011-2015 period. The descriptive analysis of the different variables shows that IMFIs are on average relatively more financially inefficient than IMFCs. This result suggests that the inefficiency of Indonesian IMFI is more a result of pure technical inefficiency (management shortfalls related to the problem of under-equipment, quality of human resources) than inefficiency of scale. With regard to the central question that this study seeks to answer, which objective (social or financial) for Indonesian MFIs, the results suggest that they are primarily concerned with their social and financial objectives.
    Keywords: Islamic microfinance, financial performance, social performance, Indonesian Islamic rural bank, DEA
    JEL: C14 G21 R51
    Date: 2019–06

This nep-mfd issue is ©2020 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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