nep-mfd New Economics Papers
on Microfinance
Issue of 2020‒10‒05
four papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. The performance of microfinance institutions: An analysis of the local and legal constraints By Delaram Najmaei Lonbani; Bram De Rock
  2. The Social Return on Investment (SROI) of four microfinance projects By Grazioli, Riccardo; Pizzo, Giampietro; Poletti, Lucia; Tagliavini, Giulio; Timpano, Francesco
  3. Measuring microfinance impact: A practitioner perspective and working methodology By Ferraro, Benedetta; Pizzo, Giampietro; Raguzzoni, Katia; Solivo, Matteo
  4. Commitment or Concealment? Impacts and Use of a Portable Saving Device: Evidence from a Field Experiment in Urban India By Janina Isabel Steinert; Rucha Vasumati Satish; Felix Stips; Sebastian Vollmer

  1. By: Delaram Najmaei Lonbani; Bram De Rock
    Keywords: Microfinance; Performance; Location and Legal status; Heterogeneity; DEA; Meta-frontier
    JEL: O16
    Date: 2020–09–17
  2. By: Grazioli, Riccardo; Pizzo, Giampietro; Poletti, Lucia; Tagliavini, Giulio; Timpano, Francesco
    Abstract: The paper develops an SROI (Social Return on Investment) analysis of four microfinance institutions (MFIs) located in Spain, Italy and Bosnia-Herzegovina. This work is part of the MeMI Project ("Measuring Microfinance Impact in the EU. Policy recommendations for Financial and Social Inclusion") funded by the EIBURS. It is an attemptto translate microcredit outcome indicators into a social return, quantified in monetary terms. After preliminary focus group analyses and staff interviews, data on outcomes of selected microcredit lines have been collected through a questionnaire administered to the borrowers. By comparing the monetary value of these outcomes (translated into an estimated impact) with the amount of related investment, we find that SROI is greater than 2 for all the credit lines analysed, meaning that every euro invested in microcredit generates at least 2 euros of social return. We also find SROI ranging between 2.33 and 6.97, mirroring the differences between MFIs in terms of target, operating model and country-level financial environment. Although the analysis is conducted on a limited number of cases and SROI calculation can be sharpened, it shows how different factors and outcomes drive the social return generated by microcredit.
    Date: 2020
  3. By: Ferraro, Benedetta; Pizzo, Giampietro; Raguzzoni, Katia; Solivo, Matteo
    Abstract: This paper introduces the concepts of impact,impact analysis/assessment and management, outlining the differences between assessment and evaluation, and highlighting their growing importance among the international and European communities.The second part presents underlying reasons for undertaking this research, introducing the methodology designed and adopted by Microfinanza which relies on indicators concerning the three dimensions, i.e. economic, social and environmental.Thirdly, two case studies are presented in order to better explain and practically implement the theoretical framework prefaced in the first part. They are not real-life cases, but they do show how the set of indicators should be applied in two different scenarios. One represents its adoption by a Microfinance Institution (MFI), presenting the impact assessment on financial supply side which aims at understanding how financial institutions could apply this aspect into their daily work. The second one, which is an impact assessment of a financial education activity, displays how the set of indicators could be used for evaluating impact assessment of specific activities.Lastly, the paper outlines the importance of impact assessment and the future steps, underscoring the growing importance of this practice at different levels and for different stakeholders.
    Date: 2020
  4. By: Janina Isabel Steinert (Technical University of Munich, TUM School of Governance; Department of Social Policy and Intervention, University of Oxford); Rucha Vasumati Satish (Chair of Development Economics, University of Goettingen); Felix Stips (Centre for Evaluation (CEval)); Sebastian Vollmer (Chair of Development Economics, University of Goettingen)
    Abstract: We study the impact of a portable "soft" commitment device on the financial behavior of low-income slum dwellers in Maharashtra, India. 1525 individuals were randomly allocated to receiving either a zip purse and a lockbox (treatment arm) or a lockbox only (control arm). Based on self-reported measures and hand counts of money held in the distributed saving devices, we document an 81% increase in total savings in the treatment group. We do not find significant reductions in temptation spending, thus suggesting that increases in savings were not primarily realized through improvements in self-control. Instead, we suggest that reduced sharing obligations are driving the effect. In additional analyses, we document a 35% decrease in past-month transfers of cash to other household members. Hence, our findings suggest that saving can be more effectively promoted by alleviating access-related rather than behavior-related constraints, and particularly by giving women access to a saving device of their own.
    Keywords: Saving, Temptation Spending, Commitment Device, RCT
    JEL: D14 D91 I31 O12 O16
    Date: 2020–09

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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