nep-mfd New Economics Papers
on Microfinance
Issue of 2020‒05‒18
two papers chosen by
Olivier Dagnelie
Université de Caen

  1. Rural financial intermediation and poverty reduction in Ghana: A micro-level analysis By Michael Danquah; Abdul Malik Iddrisu; Williams Ohemeng; Alfred Barimah
  2. Business or basic needs ?The impact of loan purpose on social crowdfunding platforms By Hadar Gafni; Marek Hudon; Anaïs Périlleux

  1. By: Michael Danquah; Abdul Malik Iddrisu; Williams Ohemeng; Alfred Barimah
    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.
    Keywords: rural financial intermediation, Poverty reduction, Welfare, Financial inclusion, Ghana
    Date: 2020
  2. By: Hadar Gafni; Marek Hudon; Anaïs Périlleux
    Abstract: Crowdfunding has created new opportunities for poor microentrepreneurs. One crucial question is the impact that the purpose of a loan—either business investment or basic necessities—may have on the success of a campaign. Investigating a prosocial crowdfunding platform, we find that loans taken out to meet basic needs are funded faster than business-related loans, especially for small amounts, which can be explained by the prosocial motivation of microlenders. Moreover, female microborrowers are funded faster than men, especially for basic needs loans. Our results therefore suggest an ethical blind spot, since prosocially motivated crowdlenders may unintentionally end up producing adverse effects, replicating gender role by supporting women to a lesser extent when they apply for business loans. This finding expands prosocial motivational theory in ethical finance.
    Keywords: crowdfunding; business loans; basic necessities; ethical finance; microfinance; microlending; gender preference
    JEL: F35 G21 G28 L31 M14
    Date: 2020–05–08

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