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on Microfinance |
| By: | Alberto Lanzavecchia (University of Padova, Padova, Italy); Maria Palumbo (University of Padova, Padova, Italy); Bharat Singh Thapa (Tribhuvan University, Kathmandu, Nepal) |
| Abstract: | People in the Hindu-Kush Himalayan region are particularly vulnerable to food insecurity related to climate change because of poor infrastructure, limited access to global markets, physical isolation, low productivity, and hazard exposure (IPCC, 2019). Farmers in this region are facing more frequent floods as well as prolonged droughts with ensuing negative impacts on agricultural yields and increases in food insecurity (Hussain et al. 2016; Manzoor et al. 2013). Drought, forest fires, floods and landslides are nowadays magnified by climate change. In Nepal, changes in monsoon patterns, increasing hydropower projects and poorly planned rural road projects will greatly exacerbate the situation of unacceptable presence of poverty and inequality of opportunities in the country. Climate change adaptation and mitigation measures at household level and micro business are urgent for policy makers. Microfinance can play a crucial role in fostering such good practice if capital is constrained by policy rules. Through the provision of credit and other financial services, microfinance helps rural people develop alternate livelihood opportunities, build assets and spread risks. There is a significant potential for taking benefit from financial innovations such as risk insurance, microfinance, conditional cash transfer programs, and targeted subsidies by scaling up these initiatives through policy and community level initiatives. However, mitigation and adaptation measures are not enough to prevent climate change adverse impacts: loss and damage (L&D) measures is becoming increasingly urgent and unavoidable. As a consequence, a full multi-level governance is needed. The Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts (2013) needs concrete implementation that requires the support of national policies and mechanisms. Following the case of Bangladesh, we call for both a top-down and bottom-up approach for addressing in a more comprehensive way L&D within the territory of Nepal. This policy paper is targeted at policy makers to urgently take action to design and implement effective strategies to tackle climate change impact to achieve economic and social progress. |
| Keywords: | climate change, adaptation, loss and damage, microfinance, Nepal |
| JEL: | Q54 R51 Q58 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0268&r=all |
| By: | Emily Breza; Martin Kanz; Leora F. Klapper |
| Abstract: | How do inexperienced consumers learn to use a new financial technology? We present results from a field experiment that introduced payroll accounts in a population of largely unbanked factory workers in Bangladesh. In the experiment, workers in a treatment group received monthly wage payments into a bank or mobile money account while workers in a control group continued to receive wages in cash, with a subset also receiving an account without automatic wage payments. We find that exposure to payroll accounts leads to increased account use and consumer learning. Those receiving accounts with automatic wage payments learn to use the account without assistance, begin to use a wider set of account features, and learn to avoid illicit fees, which are common in emerging markets for consumer finance. The treatments have real effects, leading to increased savings and improvements in the ability to cope with unanticipated economic shocks. We conduct an additional audit study and find suggestive evidence of market externalities from consumer learning: mobile money agents are less likely to overcharge inexperienced customers in areas with higher levels of payroll account adoption. This suggests potentially important equilibrium effects of introducing accounts at scale. |
| JEL: | G21 G5 O16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28249&r=all |
| By: | Simon Cornée; Marc Jegers; Ariane Szafarz |
| Abstract: | This paper unpacks the continuum of social finance institutions (SFIs), ranging from foundations offering pure grants to social banks supplying soft loans. The in-between category includes under-researched “quasi-foundations” granting loans requiring partial repayment. We develop a model under which SFIs maximize their social contribution arising from financing successful social projects, under a budget constraint dictated by their funders. Our model determines the feasibility of each SFI category and reveals that quasi-foundations are efficient and adapted to environments with low market rates. Finally, we show that value-based unconditional reciprocity from SFI borrowers can elicit a so-called “hold-up” effect, whereby the SFI maximizing its social contribution charges a high interest rate to its loyal clients. |
| Keywords: | Social Finance; Philanthropy; Foundations; Social Banks |
| JEL: | G21 D63 G24 H25 |
| Date: | 2021–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/318629&r=all |