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on Microfinance |
| By: | Laura Marcela Capera Romero (Tilburg University) |
| Abstract: | Interest rate caps, also called usury ceilings, are a widely used policy tool to protect consumers from excessive charges by loan providers. However, they are often cited as a barrier for the advancement of financial inclusion, as they may reduce the incentives to provide loans to lower-income borrowers and and to invest in branching networks, particularly in remote and isolated locations. In this paper, I exploit a change in the usury ceiling applied to micro-loans in Colombia to understand the effects of this policy across geographic markets. To quantify the welfare implications of this policy, I structurally estimate a demand and supply model that incorporates the changes in size and composition of the potential market caused by this policy change, in a context where the distribution of branching networks has a crucial role in the optimal pricing strategies of loan providers. I find that the policy generated an increase in consumer surplus at the national level that is explained by greater credit availability for riskier borrowers and the expansion of branching networks in areas that were previously under-served. A counterfactual exercise reveals that the welfare gains associated to this policy depend greatly on additional investment in branching networks, as the opening of new branches in some locations is needed to compensate the consumer welfare loss associated with the subsequent increase in interest rates after the relaxation of the ceiling. |
| Keywords: | Microfinance institutions, price ceilings, consumer welfare |
| JEL: | L11 D43 D61 G21 G28 |
| Date: | 2021–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20210055&r= |
| By: | Md. Ruhul Amin (Department of Finance and Banking, Islamic University, Bangladesh Author-2-Name: Author-2-Workplace-Name: Md. Nahiduzzaman Author-3-Name: Department of Finance and Banking, Islamic University, Bangladesh Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective - Mobile banking is a growing activity to engage the non-banking people in the banking system in Bangladesh, so researchers of this paper try to find out how much it is affected by the Coronavirus (COVID-19). Basically, this study is developed to assess the performance of mobile banking during the COVID-19 pandemic period comparing with the pre-pandemic period. Methodology/Technique - Authors use descriptive statistics to evaluate the performance of mobile bank during the study period from 2014 to August 2020. Findings - This paper finds that during the COVID period the average change of monthly number of active accounts & registered clients have increased, on the other hand the average change of monthly number of agents have decreased at the same time. Except cash in & cash out, all other types of transactions proportion of mobile banking have increased during the COVID-19 period. Novelty - As the mobile banking is a key resource for banking people as well as non-banking people to transact financial things at setting at the house, so this paper will be beneficial for mobile banking service provider organization to assess the whole things of mobile banking at this ongoing period, and they can take necessary action. Type of Paper - Empirical." |
| Keywords: | Mobile Banking, COVID-19, Financial Performance, Bangladesh. |
| JEL: | G21 G22 |
| Date: | 2021–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:afr198&r= |