nep-mfd New Economics Papers
on Microfinance
Issue of 2020‒05‒25
two papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Coping with shocks: the impact of Self-Help Groups on migration and food security By Timothée Demont
  2. Sustaining Myanmar’s microfinance sector during the COVID-19 economic crisis to support food security, resilience, and economic recovery By Toth, Russell

  1. By: Timothée Demont (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, IRD, AMSE)
    Abstract: This paper asks whether local savings and credit associations help poor rural households hit by climatic shocks. Combining data from an original field experiment with meteorological data, I investigate how Self-Help Groups (SHGs) allow households to cope with rainfall shocks in villages of East India over a sevenyear period. I show that SHGs withstand large rainfall shocks remarkably, and that credit flows are very stable in treated villages. As a result, treated households experience a higher food security during the lean season following a drought and increase seasonal migration to mitigate future income shocks. These results imply that small-scale financial institutions like SHGs help to finance temporary risk management strategies and to cope with important covariate income shocks such as droughts.
    Keywords: microfinance, weather shocks, risk management, seasonal migration, food security
    JEL: O13 O15 G21 Q54
    Date: 2020–05
  2. By: Toth, Russell
    Abstract: This note discusses the significant risks facing microfinance institutions (MFI) in Myanmar in the wake of the COVID-19 health and economic crisis and the implications for poverty and food insecurity of a serious negative shock to the MFI sector. The note is based on a desk review of the early policy responses in Myanmar, of best practices identified by international and local experts, and online discussions with leaders of MFIs operating in Myanmar. The objective is to make policymakers aware of the crucial role MFIs play in a wide range of economic activities in Myanmar, including food production, processing, trade, and marketing. A serious disruption to the MFI sector has the potential to: • Exacerbate food insecurity through damaging economic resilience in the short-to-medium term, • Lower agricultural output in the critical upcoming monsoon production season, and • Harm the potential for microfinance to contribute to economic recovery.
    Keywords: MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, microfinance, Coronavirus, coronavirus disease, Coronavirinae, severe acute respiratory syndrome coronavirus 2, economic crises, food security, resilience, economic recovery, poverty, Covid-19,
    Date: 2020

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.