nep-mfd New Economics Papers
on Microfinance
Issue of 2021‒09‒20
three papers chosen by
Olivier Dagnelie
Université de Caen

  1. Did a microfinance ‘plus’ programme empower female farmers and pastoralists and improve intrahousehold equality in rural Ethiopia? Evidence from an impact evaluation using a Project-Women’s Empowerment in Agricultural Index (pro-WEAI) survey tool By Hillesland, Marya; Kaaria, Susan; Mane, Erdgin; Alemu, Mihret; Slavchevska, Vanya
  2. Effect of mobile financial services on financial behavior in developing economies-Evidence from India By Shreya Biswas
  3. Staying afloat in the milk business: Borrowing and selling on credit among informal milk vendors in Nairobi By Myers, Emily; Heckert, Jessica; Galiè, Alessandra; Njiru, Nelly; Alonso, Silvia

  1. By: Hillesland, Marya; Kaaria, Susan; Mane, Erdgin; Alemu, Mihret; Slavchevska, Vanya
    Abstract: Using the project-Women’s Empowerment in Agricultural Index (pro-WEAI) survey tool developed by GAAP2, this study aims to estimate the impact of a microfinance ‘plus’ programme on women’s economic empowerment in communities in Oromia and Afar, Ethiopia. The programme incorporates multiple interventions, which are implemented through women-run rural savings and credit cooperatives (RUSACCOs), with the intention of improving beneficiary women’s decision-making over productive assets, control over income, and leadership in rural institutions. A major component of the programme is aimed at rural women’s greater access to credit, but interventions also include agricultural livestock and technology transfers, business training, as well as a community gender awareness component. A difference-in-difference estimator with Inverse Probability Weighting (IPW) is used to evaluate the impact of the programme on women’s empowerment in Oromia. Because of conflict in the area, baseline data collection was delayed and data was collected after some interventions had already begun in Oromia. As such, nearly all beneficiaries already had access to credit through the RUSACCOs at baseline, and both women and men were already empowered in a number of dimensions at baseline. Among households with beneficiaries who continued in good standing between baseline and midline, the programme positively contributed to both women’s and men’s empowerment with regards to respect among household members. It did not lead to additional impacts in terms of overall empowerment and gender parity within the household or across the other pro-WEAI indicators. However, it appears that, by maintaining good standing in the RUSACCOs, female participants were able to maintain high levels of empowerment across the other indicators. A second group of beneficiary women, who either chose to leave the RUSACCO or did not maintain good standing as a member, were also highly empowered across many dimensions at baseline but experienced large average decreases in empowerment across a number of indicators by midline. In Afar, using the midline data only, a single-difference estimator with Inverse Probability Weighting is used to evaluate the impact of the programme. In Afar, the programme had a significant impact on women’s overall empowerment. As we expected, given the nature of the programme, there were significant positive results in terms of access to and decisions on financial services, group membership, and membership in influential groups. There were also positive impacts on control over the use of income, suggesting that the programme contributed to greater control over the use of the output from agricultural activities and control over income from agricultural and non-agricultural activities. On the other hand, the programme also appears to have resulted in reduced empowerment on average with regards to autonomy in income.
    Keywords: ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; programmes; gender; women; farmers; women farmers; pastoralists; equality; impact assessment; women's empowerment; microfinance; mixed model method; pro-WEAI; gender parity; agricultural households; Women’s Empowerment in Agriculture Index; WEAI
    Date: 2021
  2. By: Shreya Biswas
    Abstract: The study examines the relationship between mobile financial services and individual financial behavior in India wherein a sizeable population is yet to be financially included. Addressing the endogeneity associated with the use of mobile financial services using an instrumental variable method, the study finds that the use of mobile financial services increases the likelihood of investment, having insurance and borrowing from formal financial institutions. Further, the analysis highlights that access to mobile financial services have the potential to bridge the gender divide in financial inclusion. Fastening the pace of access to mobile financial services may partially alter pandemic induced poverty.
    Date: 2021–09
  3. By: Myers, Emily; Heckert, Jessica; Galiè, Alessandra; Njiru, Nelly; Alonso, Silvia
    Abstract: Studies on credit schemes for small-scale entrepreneurs have documented their potential to alleviate poverty and improve food security, nutrition, and health outcomes in low- and middle-income countries. Other studies find mixed impacts of credit schemes on reducing income inequality, empowering women, and enhancing children’s education. Moreover, growing evidence finds that entrepreneurs offer credit to customers; little is known about what this practice means for entrepreneurs, and even less about gendered differences in this practice. Herein, we consider the case of final retailers in agricultural value chains and examine how male and female informal milk vendors from peri-urban Nairobi borrow and sell on credit, and how these experiences affect their businesses where there are few formal safeguards to ensure repayment. In 2017, we conducted 49 individual interviews, four key informant interviews, and six focus groups with men and women who were current or former milk vendors. A thematic analysis revealed that vendors sell on credit to appeal to customers, which may be advantageous when vendors need to rid themselves of milk before it spoils, regardless of gender. With few strategies to recoup costs from customers who fail to repay, however, failure to collect debt may cause default for vendors who acquired milk via informal borrowing. The consequences are likely more severe for women vendors, who generally have less capital to fall back on relative to men. Development organizations should identify gender-sensitive financial services that can help entrepreneurs maintain viable businesses despite the volatility of borrowing and selling on credit.
    Keywords: KENYA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; milk production; enterprises; credit; microenterprises; gender; agricultural value chains; informal sector; qualitative analysis
    Date: 2021

This nep-mfd issue is ©2021 by 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.