nep-mfd New Economics Papers
on Microfinance
Issue of 2022‒11‒21
four papers chosen by
Rachita Gulati
IIT Roorkee

  1. Understanding and Measuring Financial Inclusion in the Philippines By Corpus, John Paul; Debuque-Gonzales, Margarita
  2. Poverty Alleviation and Interhousehold Transfers : Evidence from BRAC's Graduation Program in Bangladesh By Gulesci,Selim
  3. The Role of Gender in Agent Banking : Evidence from the Democratic Republic of Congo By Chamboko,Richard; Cull,Robert J.; Gine,Xavier; Heitmann,Soren; Reitzug,Fabian; Van Der Westhuizen,Morne
  4. Digitizing Cash Transfers to Remote Rural Populations : Challenges and Solutions from theExperience of Zambia By Hobson,Emma Sameh Wadie; Kilfoil,Craig Patrick; Martin,Andrea

  1. By: Corpus, John Paul; Debuque-Gonzales, Margarita
    Abstract: Financial inclusion can help curb poverty, reduce inequality, and potentially enhance productivity and long-term growth. However, empirical research on financial inclusion remains limited, particularly at the country level. To fill this gap, this paper conducts an empirical exploration of financial inclusion in the Philippines. Its specific objectives are to: (1) benchmark financial inclusion in the Philippines versus other countries in developing Asia; (2) capture stylized facts about financial inclusion in the country based on analysis of demand-side data; and (3) construct a subnational financial inclusion index that can be used, moving forward, to estimate the links of financial inclusion with economic growth, development, and financial stability. The Philippines leads comparator countries in terms of the enabling environment, has mixed performance in financial outreach, and lags in financial account ownership and usage. Less than 15 percent of adults in the country save money using a formal account, while less than a tenth use formal credit, among the lowest proportions in the region. In terms of stylized facts, we find that greater education, higher income, being female, being employed, and being older (up to a certain point) make financial inclusion, particularly formal account ownership and credit use, more likely. Fintech in the form of mobile money appears promising with seemingly the most equitable access among the different forms of financial inclusion, although account ownership remains scant and limited to more urbanized areas. Individuals with less education and those coming from lower-income households are more likely to be "involuntarily" excluded from the formal financial sector. To construct a subnational financial inclusion index, this paper makes use of supply-side data on outreach and usage of financial services in Philippine regions, with weights derived via principal component analysis. The computed regional index is positively associated with GDP per capita, literacy, and electricity access, and negatively associated with poverty incidence, in line with the demand-side analysis and reasonable expectations about the relationship between financial inclusion and development indicators. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: Financial inclusion; financial inclusion index
    Date: 2021
  2. By: Gulesci,Selim
    Abstract: Poor households often rely on transfers from their social networks for consumption smoothing, yet there is limited evidence on how antipoverty programs affect informal transfers. This paper exploits the randomized roll-out of BRAC's ultra-poor graduation program in Bangladesh and panel data covering over 21,000 households over seven years to study the program's effects on interhousehold transfers. The program crowds out informal transfers received by the program's beneficiaries, but this is driven mainly by outside-village transfers. Treated ultra-poor households become more likely to both give and receive transfers to/from wealthier households within their communities; and less likely to receive transfers from their employers. As a result, the reciprocity of their within-village transfers increases. The findings imply that, within rural communities, there is positive assortative matching by socio-economic status. A reduction in poverty enables households to engage more in reciprocal transfer arrangements and lowers the interlinkage of their labor with informal insurance.
    Keywords: Inequality,Livestock and Animal Husbandry,Health Care Services Industry,Labor Markets,Rural Labor Markets
    Date: 2020–11–04
  3. By: Chamboko,Richard; Cull,Robert J.; Gine,Xavier; Heitmann,Soren; Reitzug,Fabian; Van Der Westhuizen,Morne
    Abstract: This paper uses a unique data set with 1.1 million customer transactions from a microfinanceinstitution in the Democratic Republic of Congo from 2017 to 2018. The paper provides evidence of assortative gendermatching in agent banking transactions, as clients prefer to transact with agents of their own gender. Female clientsshow a robust preference for female agents even when they are less available, particularly when making high-valuetransactions and when they have higher account balances. The underrepresentation of female agents may contribute to thepersistent gender gap in financial access and usage.
    Keywords: Gender and Development,Financial Sector Policy,Banks & Banking Reform,Inequality
    Date: 2020–10–21
  4. By: Hobson,Emma Sameh Wadie; Kilfoil,Craig Patrick; Martin,Andrea
    Abstract: There is currently a major focus on digitization within African countries, with the interest of,on the one hand, increasing efficiency and lowering the cost-of-service delivery, and on the other hand, increasingfinancial inclusion for excluded parts of the population. Zambia provides an important case study of digitization ofsocial protection transfers. Whilst Zambia is sparsely populated with remote rural populations often living up to100 km from the nearest town, making beneficiaries hard to reach with digital services, the country has successfullydemonstrated that cash transfers can be digitized for remote rural populations to varying extents, tailored to theirparticular context. This Discussion Note presents challenges faced and solutions found in digitizing cash transferpayments in Zambia, which may be of interest to other countries embarking on similar endeavors.
    Date: 2022–09–30

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