nep-mfd New Economics Papers
on Microfinance
Issue of 2020‒06‒22
three papers chosen by
Olivier Dagnelie
Université de Caen

  1. Child Labor and Schooling Decisions among Self-Help Groups Members in Rural India By Jean-Marie Baland; Timothée Demont; Rohini Somanathan
  2. There Has Been No Silent Revolution: A decade of empowerment for women in rural Tamil Nadu By Isabelle Guérin; Sébastien Michiels; Christophe Jalil Nordman; Elena Reboul; Govindan Venkatasubramanian
  3. Managerial Compensation and Firm Performance in Cameroon Microfinance Institutions By Nkiendem Felix; Douanla Jean; Innocent Essomme; Nchitu Asah; Roland Gahmuti

  1. By: Jean-Marie Baland (CRED - Centre de Recherche en Economie du Developpement - Facultés Universitaires Notre Dame de la Paix (FUNDP) - Namur); Timothée Demont (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Rohini Somanathan (Delhi School of Economics)
    Abstract: This paper investigates the consequences of the participation in informal microfinance groups, known as Self-Help Groups (SHGs), on children's education and work in rural India. We analyze first-hand data collected from a panel of households in areas where new groups were formed in 2002. We observe these households three times over a five year period, which allows us to examine medium-term effects of SHG participation. We find a robust and strong increase in treated children's secondary school enrollment rate over time, by about 20 percentage points, to be compared with a baseline rate of 45%. This effect stems from a quicker grade progression, leading to lower drop-out rates between primary and secondary school. We find no decrease in overall child labor (but a reorientation towards part-time domestic work), indicating that there is no clear substitution between labor and education for children of secondary-school age in rural India. Contrary to what is usually believed, we show that credit does not play any direct role in the increased schooling. However, we find evidence that it partly follows from social interactions within SHGs, under the form of peer effects. Our findings indicate that microfinance groups can have large effects on the human capital of participants and their families, though such effects can take time to materialize and happen through unintended channels.
    Keywords: Microfinance,Self-Help Groups,Education,Child labor,Peer effects,India
    Date: 2018–07
  2. By: Isabelle Guérin (IRD, CESSMA (Paris, France), IFP (Pondicherry, India)); Sébastien Michiels (IRD, IFP (Pondicherry, India)); Christophe Jalil Nordman (IRD, UMR LEDa, DIAL, PSL, Université Paris Dauphine, IFP (Pondicherry, India)); Elena Reboul (Université Paris Diderot, Cessma (Social Science Center Studies in African, American and Asian Worlds)); Govindan Venkatasubramanian (IFP (Pondicherry, India))
    Abstract: In 2003, the then Chief Minister of Tamil Nadu in southern India, Jayaram Jayalalithaa, gave a speech about the "silent revolution" of the emancipation of Indian women. But 15 years on, regrettably, the promises of that revolution do not seem to have been fulfilled. Thanks to the various programmes set up to champion women's empowerment (involving local NGOs, public programmes and international support), women are now more prominent in certain public spaces and are able to play a genuine advocacy role as regards the public authorities. Girls education has also significantly improved. But it has not brought about improved employment opportunities. Women are in fact losing out on paid employment (as is the case in India as a whole). They are also heavily indebted (not only from microcredit, but also informal lending and lending from private financial companies). Their indebtedness is disproportionate to their income, and compared to men. Moreover, women almost exclusively put debt towards the social reproduction of families. Reduced opportunities for paid employment and massive debt have hit Dalit women particularly hard. Our analyses use data collected over more than a decade in a rural area of Tamil Nadu, drawing together ethnography and quantitative data, including panel data (2010-2016). They shed light on the complexity of social change, intertwining forms of domination (here, caste and gender), and the ambiguous qualities of so-called empowerment programmes, whose impacts have been various and unexpected.
    Keywords: empowerment, gender, labour, debt, microcredit, India
    Date: 2020–04
  3. By: Nkiendem Felix (Université de Dschang); Douanla Jean (Université de Dschang); Innocent Essomme; Nchitu Asah (Université de Yaoundé II); Roland Gahmuti (Université de Yaoundé II)
    Abstract: The rise in managerial pay over the past decades has sparked an intense debate about the nature of pay setting process. Many theoretical and empirical findings have portrayed direct and opposing relations between managerial compensation and firm performance within enterprises in general and financial institutions in particular.Here, managerial compensation retained as endogenous variable is captured using base salary and bonuses while firm performance as exogenous variable is measured using return on equity (ROE) and firm size while board size, is capturedthrough ownership and tenure served as control variables. We used questionnaires administered to managers of the respective institutions alongside with their pay slips and report of financial statement. STATA 12.0 was used to carry out our statistical test and regression analysis. Our sample survey consisted of 10 microfinance establishmentsin Cameroon for the period of 2007-2012. The results obtained depicted a negative significant relationship between pay and ROE regarding micro-finance establishments. Firm size on its part portrayed a positive influence on managers' compensation in micro-finance establishments. We recommend that decision-making in microfinance establishments should be driving incentives to cap managerial compensation with firm performance.
    Abstract: L'augmentation des rémunérations des cadres au cours des dernières décennies a suscité un débat intense sur la nature du processus de fixation des rémunérations. De nombreux résultats théoriques et empiriques ont mis en évidence des relations directes et opposées entre la rémunération des cadres et la politique de rémunération des entreprises. Dans ce cas, la rémunération des dirigeants conservée en tant que rémunération de base est la variable endogène qui est cerner à l'aide du salaire de base et des primes, tandis que la performance de l'entreprise en tant que variable exogène est mesurée à l'aide du rendement sur les capitaux propres (ROE) et la taille de l'entreprise, tandis que la taille du conseil d'administration est prise en compte par la propriété et la durée du mandat qui servent de variables de contrôle. Nous avons utilisé des questionnaires administrés aux gestionnaires des institutions respectives, en même temps que leurs fiches de paie et leur rapport d'état financier. STATA 12.0 a été utilisé pour effectuer notre test statistique et notre analyse de régression. Notre enquête par sondage comprenait 10 questionnaires sur la microfinance au Cameroun pour la période 2007-2012. Les résultats obtenus font apparaître une relation négative significative entre la rémunération et les Resultats concernant les établissements de micro-finance. La taille de l'entreprise, quant à elle, a eu une influence positive sur la rémunération des dirigeants en les établissements de micro-finance. Nous recommandons que la prise de décision dans les établissements de microfinance soit un facteur d'incitation au plafonnement de la rémunération des cadres avec des performances fermes.
    Keywords: Performance,ROE and Firm Size,Managerial Compensation
    Date: 2018–07–10

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