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on Microfinance |
| By: | Christiansen, T.; Weeks, M. |
| Abstract: | Various poverty reduction strategies are being implemented in the pursuit of eliminating extreme poverty. One such strategy is increased access to microcredit in poor areas around the world. Microcredit, typically defined as the supply of small loans to underserved entrepreneurs that originally aimed at displacing expensive local money-lenders, has been both praised and criticized as a development tool Banerjee et al. (2015c). This paper presents an analysis of heterogeneous impacts from increased access to microcredit using data from three randomised trials. In the spirit of recognising that in general the impact of a policy intervention varies conditional on an unknown set of factors, particular, we investigate whether heterogeneity presents itself as groups of winners and losers, and whether such subgroups share characteristics across RCTs. We find no evidence of impacts, neither average nor distributional, from increased access to microcredit on consumption levels. In contrast, the lack of average effects on profits seems to mask heterogeneous impacts. The findings are, however, not robust to the specific machine learning algorithm applied. Switching from the better performing Elastic Net to the worse performing Random Forest leads to a sharp increase in the variance of the estimates. In this context, methods to evaluate the relative performing machine learning algorithm developed by Chernozhukov et al. (2019) provide a disciplined way for the analyst to counter the uncertainty as to which algorithm to deploy. |
| Keywords: | Machine learning methods, microcredit, development policy, treatment effects, random forest, elastic net |
| JEL: | D14 G21 I38 O12 O16 P36 |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:20100&r=all |
| By: | Mirriam Muhome Matita; Takondwa Chauma (Lilongwe University of Agriculture and Natural Resources, Malawi) |
| Abstract: | Mobile financial services are gaining prominence and could be a possible avenue for fast-tracking financial inclusion in developing countries, including Malawi. However, adoption and usage of such services remains low among the Malawi population. This study investigates the influence of financial literacy on financial behaviour of individuals in Malawi, specifically use of mobile phone-based financial transactions. Descriptive and econometric analyses were conducted using cross-sectional data obtained from the Reserve Bank of Malawi. Findings reveal that the likelihood of using mobile financial services increases with increasing levels of financial literacy, type of employment and peri-urban residence. Furthermore, men are more likely to transact on mobile phones than females and that although income levels matter in the use of mobile financial transactions, the magnitude of effect is negligible. Results suggest opportunities for expanding access to financial services and products such as differentiation in financial literacy education by characteristics of population including gender of users. Informal settings do not preclude expansion of digital payments, and therefore financial product innovation and addressing rural resident’s constraints to access mobile financial services is crucial. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:aer:wpaper:369&r=all |