nep-mfd New Economics Papers
on Microfinance
Issue of 2022‒12‒05
five papers chosen by
Rachita Gulati
IIT Roorkee

  1. Disparities in financial literacy, pension planning, and saving behavior By Bucher-Koenen, Tabea; Hackethal, Andreas; Kasinger, Johannes; Laudenbach, Christine
  2. Violence and financial decisions: evidence from mobile money in Afghanistan By Blumenstock, Joshua; Callen, Mike; Ghani, Tarek; González, Roberto
  3. What Drives entrepreneurial aspiration among members of Self-help group? Evidence from JEEViKA By Kumar, Naveen; Raj, Vishal; Kumar, Sonu
  4. Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries By Ablam Estel Apeti
  5. Give Me a Pass: Flexible Credit for Entrepreneurs in Colombia By Lasse Brune; Xavier Giné; Dean Karlan

  1. By: Bucher-Koenen, Tabea; Hackethal, Andreas; Kasinger, Johannes; Laudenbach, Christine
    Abstract: Financial literacy affects wealth accumulation, and pension planning plays a key role in this relationship. In a large field experiment, we employ a digital pension aggregation tool to confront a treatment group with a simplified overview of their current pension claims across all pillars of the pension system. We combine survey and administrative bank data to measure the effects on actual saving behavior. Access to the tool decreases pension uncertainty for treated individuals. Average savings increase-especially for the financially less literate. We conclude that simplification of pension information can potentially reduce disparities in pension planning and savings behavior.
    Keywords: saving behavior,retirement planning,digital planning tool
    JEL: D14 G11 G51 G53
    Date: 2022
  2. By: Blumenstock, Joshua; Callen, Mike; Ghani, Tarek; González, Roberto
    Abstract: We provide evidence that violence reduces the adoption and use of mobile money in three separate empirical settings in Afghanistan. First, we spatially merge nationwide administrative data on 96,000 violent events with the universe of mobile money transactions and find that users exposed to nearby violence reduce their mobile money account balances and conduct fewer transactions. Second, using high-frequency panel survey data from a field experiment, we find that subjects expecting violence are half as likely to respond to a randomized mobile money supply shock as those not expecting violence. Finally, analyzing financial survey data from nineteen of Afghanistan’s 34 provinces, we find that individuals expecting violence hold more cash. Collectively, our evidence suggests that violence can impede the growth of formal financial systems.
    Keywords: violence; financial development; mobile money
    JEL: O17 O33 D14
    Date: 2022
  3. By: Kumar, Naveen; Raj, Vishal; Kumar, Sonu
    Abstract: This study explores determinants of entrepreneurship aspirations among members of women’s self-help groups. Data were collected using semi-structured interview schedule from 180 members of self-help groups in three districts of Bihar. Considering personality traits entrepreneurial aspirations of women members were measured under seven dimensions using likert scale. Using ANCOVA, results reflect that age of self-help group, family size, frequency of loan and loan amount positively influence the entrepreneurial aspiration of members. In addition to this, members belong to scheduled caste, members with productive assets, primary education, and working experience in the service industry have higher entrepreneurial aspiration. Finding suggests for more impetus of members access of productive assets, skill-based capacity building to members and leaders, and intact membership with self-help group for long will enable and strengthen women workforce as potential entrepreneurs
    Date: 2022–07–11
  4. By: Ablam Estel Apeti (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: Based on a sample of 76 developing countries over 1990-2019, we assess the effect of adopting mobile money on consumption volatility using entropy balancing. We reveal that countries with mobile money exhibit lower consumption volatility. After checking the robustness of this result, we show that the key drivers of mobile money's stabilizing effect are financial inclusion and migrant remittances. Heterogeneity tests conducted indicate the sensitivity of the result to time and type of mobile money and to some structural factors, including trade openness, inflation, rural population, the rule of law, and level of development.
    Keywords: Mobile money,entropy balancing,consumption volatility,developing countries
    Date: 2022
  5. By: Lasse Brune; Xavier Giné; Dean Karlan
    Abstract: Microcredit promised business growth for small firms lacking access to banking loans. Yet while reaching millions, recent randomized evaluations suggest limited average business impacts. Critics often blame contract rigidity, specifically the fixed and frequent installments, for the lack of productive risk-taking. But such rigidity may instill borrower discipline. We partnered with a Colombian lender that offered first-time borrowers a flexible loan that permitted delaying up to three monthly repayments. We find null effects for revenue and profits but increases in loan defaults. The evidence thus aligns with established microlender practice of offering rigid contracts to first-time borrowers.
    JEL: G21 O21
    Date: 2022–11

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