nep-mfd New Economics Papers
on Microfinance
Issue of 2021‒05‒10
two papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Asset-based Microfinance for Microenterprises: Evidence from Pakistan By Bari, Faisal; Malik, Kashif; Meki, Muhammad; Quinn, Simon
  2. Business analytics for managing performance of microfinance Institutions: A flexible management of the implementation process By Isabelle Piot-Lepetit; Joseph Nzongang

  1. By: Bari, Faisal; Malik, Kashif; Meki, Muhammad; Quinn, Simon
    Abstract: We conduct a field experiment offering graduated microcredit clients the opportunity to finance a business asset worth four times their previous borrowing limit. We implement this using a hire-purchase contract; our control group is offered a zero-interest loan. We find large, significant and persistent effects from asset finance contracts: treated microenterprise owners run larger businesses and enjoy higher profits; consequently, household consumption increases, particularly on food and children's education. A dynamic structural model with non-convex capital adjustment costs rationalises our results; this highlights the potential for welfare improvements through large capital injections that are financially sustainable for microfinance institutions.
    Keywords: Capital Adjustment Costs; Microfinance; Randomized field experiment
    Date: 2021–02
  2. By: Isabelle Piot-Lepetit (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Joseph Nzongang (Université de Dschang, Faculté des Sciences Economiques et de Gestion de Dschang - Université de Dschang)
    Abstract: Microfinance institutions are social enterprises that focus on the provision of financial services to poor populations excluded from the conventional banking system. These organizations face a double-bottom line, dealing simultaneously with a financial and social objective. The challenge of putting it into action is great, especially when there is a need to involve all stakeholders and to replicate the experience to new communities. One way to sustain both financial performance and social impacts is to develop a business analytics solution aiming at measuring and expanding social impacts in a financially sustainable way. This paper describes main elements to be considered, in particular the organizational context, the development process, and implementation issues that would facilitate or impede the deployment of a business analytics initiative in practice. Finally, two main components of the implementation process are specifically pointed out: a behavioral fit of the business analytics solution to the cultural context of the organization, and the country where it is deployed, and a flexible commitment in the management of the business analytics initiative implementation.
    Keywords: business analytics,decision-making,efficiency measurement,financial performance,social impact,data envelopment analysis,developing countries,microfinance,social enterprises
    Date: 2021

This nep-mfd issue is ©2021 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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