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on Microfinance |
| By: | Augsburg,Britta; Caeyers,Bet; Malde,Bansi Khimji |
| Abstract: | The low take-up of cost-effective and highly subsidised preventive health technologies in low-income countries remains a puzzle. One under-studied reason is that the design of subsidy schemes is such that households remain financially constrained. This paper analyses whether, and how, micro-finance supports a large public health subsidy program in the developing world -- the Swachh Bharat Mission -- in achieving its aim of increasing uptake of individual household latrines. Exploiting a cluster randomised controlled experiment of a sanitation micro-finance program that coincided with the launch of the SBM program, and unique survey data matched to administrative data, findings reveal that the complementarity runs on two levels: First, micro-credit allows households officially ineligible for the subsidy to invest in sanitation by alleviating credit constraints. Second, micro-credit also helps subsidy eligible households to overcome short-term liquidity constraints induced by the remuneration-post-verification subsidy design to invest in sanitation. Subsidy eligible households living in areas experiencing large delays in subsidy disbursement, or high toilet costs, are more likely to take a sanitation loan, but less likely to use the loan to construct a toilet. |
| Date: | 2019–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8846&r=all |
| By: | Seema Jayachandran; |
| Abstract: | This article reviews the recent literature in economics on small-scale entrepreneurship (“microentrepreneurship”) in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector; the impacts of access to credit and other financial services; the impacts of business training; barriers to hiring; and the distinction between self-employment by necessity and self-employment as a calling. The article devotes special attention to unique issues that arise with female entrepreneurship. |
| JEL: | L26 J16 J24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8086&r=all |
| By: | Augsburg,Britta; Caeyers,Bet; Giunti,Sara; Malde,Bansi Khimji; Smets,Susanna |
| Abstract: | Credit constraints are considered to be an important barrier hindering adoption of preventive health investments among low-income households in developing countries. However, it is not obvious whether, and the extent to which, the provision of labelled micro-credit -- where the loan is linked to the investment only through its label -- will boost human capital investments, particularly when it is characterised by other attractive attributes, such as a lower interest rate. This paper studies a cluster randomised controlled trial of a sanitation micro-credit program in rural India, which made available lower interest loans for sanitation. The loans were linked with sanitation through their name only. The loans were not bundled with any toilet, and loan use was weakly monitored, but not enforced. Hence it is not directly obvious that the loan should boost sanitation investments. A simple theoretical framework indicates that the intervention could increase sanitation ownership through three channels -- relaxation of credit constraints, salience of the loan label, or the lower interest rate. The presented empirical evidence, combined with model predictions, allow to conclude that the loan label -- which to date has not received much attention in the literature -- significantly impacts households borrowing and investment behaviour. Labelling loans is thus a viable strategy to improve uptake of lumpy preventive health investments. |
| Date: | 2019–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8845&r=all |
| By: | Wieser,Christina; Bruhn,Miriam; Kinzinger,Johannes Philipp; Ruckteschler,Christian Simon; Heitmann,Soren |
| Abstract: | This paper studies the effect of rolling out mobile money agents in rural Northern Uganda. In a randomized experiment, 168 areas were randomly selected to receive an agent in 2017, with another 163 areas serving as a control group. Administrative data on mobile money transactions suggest that the agent rollout increased the probability of sending and receiving peer-to-peer transfers. Data from a 2018 survey of more than 4,500 households show that the agent rollout led to cost-savings for remittance transactions. It also doubled the nonfarm self-employment rate, from 3.4 to 6.4 percent, and reduced the fraction of households with very low food security from 62.9 to 47.2 percent, in areas far from a bank branch. The analysis finds no effect on savings, agricultural outcomes, or poverty. Overall, the findings add new evidence that mobile money can improve livelihoods even in poor and remote settings. |
| Keywords: | ICT Economics,Inequality,Employment and Unemployment,Transport Services,Nutrition,Food Security |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8913&r=all |