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on Microfinance |
| By: | María José Roa (Investigadora del Instituto de Investigaciones Económicas y Sociales Francisco de Vitoria); Alejandra Villegas (Investigadora de Universidad Iberoamericana Ciudad de México); Ignacio Garrón (Consultor indpendiente) |
| Abstract: | This paper evaluates the imposition of caps on microcredit lending rates through directed credit policies for productive sectors. This financial inclusion intervention provides a unique quasi-experiment, allowing to estimate its causal effect following a difference-in-differences analysis. Our results suggest that the imposition of interest rate ceilings negatively affected the portfolio balance of new microcredits and loans to SMEs granted by MFIs. Particularly, we find robust results indicating that the balance of the microcredit and SME loans portfolio granted by MFIs, relative to the company portfolio granted by banks, decreased by 26.1% for an average MFI for the period 2011-2018. |
| Keywords: | Interest rate ceilings, financial inclusion, credit access, microcredit loans, small and medium enterprises loans . |
| JEL: | G18 G28 G38 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:202003&r=all |
| By: | Chowdhury, Shyamal; Smits, Joeri; Sun, Qigang |
| Abstract: | Agricultural productivity in many developing countries remains low owing mostly to the low adoption of readily available modern technologies such as modern seeds, chemical fertilisers and mechanized irrigation. To understand if relaxing credit constraints increases the adoption of agricultural technologies, we use results from a field experiment designed to estimate the effect of access to microcredit on agricultural technology adoption. We find mere offering of microcredit to smallholder farmers does not lead to the adoption of agricultural technologies. Nevertheless, there is strong evidence of a heterogeneous treatment effects: borrowers with medium-sized farms are 13.3 per cent more likely to adopt modern technologies. In addition, less-risk averse borrowers, and present-biased borrowers are 13.1 per cent and 12.3 per cent more likely to adopt modern technologies. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies |
| Date: | 2020–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare20:305247&r=all |
| By: | Mirpourian, Mehrdad |
| Abstract: | Well-designed financial products improve the overall financial health of users. The design of products is particularly important for low-income customers, for whom product design drives behavior. In this paper, we offer insights on low-income customers’ savings behavior and on how they use their savings accounts. More specifically, we focus on detecting and measuring the effects of a set of explanatory variables on transaction amount. To do so, we use quantile regression (QR) and apply it to a novel dataset collected from a financial institution in Nigeria. The data show individual transactions made using the account over time, along with additional socioeconomic information on each customer. Using these data, we specify a model that incorporates customer age, account age, location, transaction type, gender, and seasonality effects, evaluating their correlation with transaction size. With the QR model, we are able to study the effect of the explanatory variables within each quantile of transaction amount instead of just showing trends on average. This is the first study to examine transaction size among low-income customers through a gender lens using QR. All of the variables incorporated in this model have a significant effect on transaction size. However, among all of the explanatory variables, the season in which a customer places a transaction (seasonality effect) has the largest impact on predicting transaction amounts. |
| Keywords: | Financial Inclusion, Behavioral Finance, Savings, Quantile Regression, Nigeria |
| JEL: | D03 |
| Date: | 2020–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103221&r=all |