nep-mfd New Economics Papers
on Microfinance
Issue of 2023‒02‒20
three papers chosen by
Rachita Gulati
IIT Roorkee

  1. Business Training with a Better-Informed Lender: Theory and Evidence from Microcredit in France By Renaud Bourlès; Anastasia Cozarenco; Dominique Henriet; Xavier Joutard
  2. The role of the Bank of Algeria in the formalization of informal finance By Derder Nacéra; Benammar Abdelkader
  3. Financial access and labor market outcomes: evidence from credit lotteries By Bernardus F Nazar Van Doornik; Armando Gomes; David Schoenherr; Janis Skrastins

  1. By: Renaud Bourlès (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, IUF - Institut Universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche); Anastasia Cozarenco (CERMi - Centre for European Research in Microfinance, MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Dominique Henriet (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Xavier Joutard (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: In the microfinance sector, experienced lenders enjoy an information advantage over first-time entrepreneurs. Our study proposes an analysis of the business training provided on a par with microloans and its potential effect on borrowers'behavior. First, we present a simple theoretical mechanism showing that an information advantage concerning borrower risk can lead to a non-monotonic relationship between risk and business training provision. Second, using a hand-collected data set of loan applications to a French MFI, we empirically examine the relationship between business training provision and borrower risk, controlling for selection bias and endogeneity. The collected evidence supports the existence of a non-monotonic relationship and shows that business training significantly increases the survival time of loans. Our results are robust to alternative econometric models.
    Keywords: Business training, Microcredit, Informed lender
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:hal:spmain:halshs-03934370&r=mfd
  2. By: Derder Nacéra (UMBB - Université M'Hamed Bougara Boumerdes); Benammar Abdelkader (Ecole Supérieure de Commerce –Koléa, (Algérie))
    Abstract: This study aims to identify the extent of informal finance in Algeria, to review the main decisions taken by the central bank in its fight against the informal and discuss their impact on informal finance. Faced with an informal finance that persists, new actions must be taken, not only on the regulatory level, but must also be part of a strategy aimed at strengthening the operational efficiency of the banking system.
    Abstract: Ce travail vise à mettre la lumière sur l'importance de la finance informelle en Algérie, de passer en revue les principales décisions prises par la banque centrale dans sa lutte contre l'informalité et de ressortir leur impact sur la finance informelle. Face à une finance informelle qui perdure, de nouvelles actions doivent être engagées, non seulement sur le plan réglementaire, mais doivent aussi s'inscrire dans une stratégie visant à renforcer l'efficacité opérationnelle du système bancaire.
    Keywords: banque d'Algérie secteur informel finance informelle formalisation. Code jel : E26. G21. G29 bank of Algeria informal sector informal finance formalization. Jel Classification Codes : E26. G21. G29, banque d'Algérie, secteur informel, finance informelle, formalisation. Code jel : E26. G21. G29 bank of Algeria, informal sector, informal finance, formalization. Jel Classification Codes : E26. G21. G29
    Date: 2022–12–04
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-03904818&r=mfd
  3. By: Bernardus F Nazar Van Doornik; Armando Gomes; David Schoenherr; Janis Skrastins
    Abstract: We assess the employment and income effects of access to credit dedicated to investment in individual mobility by exploiting time-series variation in access to credit through random lotteries for participants in a group-lending mechanism in Brazil. We find that access to credit for investment in individual mobility increases formal employment rates and salaries, yielding an annual rate of return of 12 percent. Consistent with a geographically broader job search, individuals transition to jobs farther from home and public transportation. Our results suggest that accessing distant labor markets through credit for investment in individual mobility yields high and persistent returns.
    Keywords: access to credit, household finance, labor mobility, spatial mismatch
    JEL: D14 G23 J62 R20 R23
    Date: 2023–01
    URL: http://d.repec.org/n?u=RePEc:bis:biswps:1071&r=mfd

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