nep-mfd New Economics Papers
on Microfinance
Issue of 2023‒02‒27
five papers chosen by
Aastha Pudasainee and

  1. Digitalization and Social Protection: Macro and Micro Lessons for Vietnam By Amr Hosny; Alexandre Sollaci
  2. Remittances in times of crisis: evidence from Italian corridors By Alessio Ciarlone
  3. India's credit landscape in a post-pandemic world By Rajeswari Sengupta; Harsh Vardhan
  4. Financial Inclusion Measurement: Deepening the Evidence By Indradeep Ghosh; Susan Thomas
  5. Sustainable Finance in Emerging Markets: Evolution, Challenges, and Policy Priorities By Mr. Fabio M Natalucci; Deepali Gautam; Rohit Goel

  1. By: Amr Hosny; Alexandre Sollaci
    Abstract: The COVID-19 shock has underscored the importance of digital tools for enhancing the effectiveness and efficiency of social protection systems. Cross-country evidence suggests that digital IDs linked with bank and/or mobile money accounts can improve the delivery of social protection programs and better reach eligible beneficiaries. Using data from the Vietnam Household Living Standard Survey, we present micro simulations on the welfare gains of digital social protection during the pandemic. While digitalization offers opportunities, potential risks would need to be carefully managed. Vietnam is advancing on individual pieces of the digitalization puzzle, including full digital IDs and mobile money, and the next step is to put these pieces together.
    Keywords: digitalization; social protection; Covid-19; welfare gain; digitalization puzzle; micro lesson; government transfer; procurement payment; Mobile banking; Digital financial services; Informal employment; Income; Global
    Date: 2022–09–16
  2. By: Alessio Ciarlone (Banca d'Italia)
    Abstract: Defying expectations, remittance flows to low- and middle-income countries withstood the shock related to the outbreak of the COVID-19 pandemic. Relying on detailed data for a large panel of remittance-receiving economies, this paper explores the key drivers of remittance outflows from Italy and finds empirical support to plausible explanations for their resilience during the pandemic. The impulse response functions obtained via a local projection approach confirm the paramount role of remittances as automatic stabilizers. Notwithstanding a reduction in their personal incomes due to the recession in Italy, migrant workers stepped up their financial support to their families back home to cushion the impact of the pandemic. In this regard, a shift from informal to formal remittance channels played a significant role. More specifically, the acceleration in the digitalization of financial services during, and because of, the pandemic had important spillover effects on migrants’ remittances, thus overcoming the hurdles created by the COVID-related restrictions adopted in both the sending and the receiving countries.
    Keywords: Remittances, COVID-19, local projections, digitalisation, mobile money, informality
    JEL: F24 I10 O11
    Date: 2023–02
  3. By: Rajeswari Sengupta (Indira Gandhi Institute of Development Research); Harsh Vardhan
    Abstract: In this paper we study the impact of the Covid-19 pandemic on the financial sector of the Indian economy, specifically on the banking sector, the non-banking finance companies (NBFCs) and the bond market, for the period March 2020 to March 2022. In order to set the context, we first summarise the conditions of the financial sector in the pre-pandemic period. We highlight the long-term structural trends and their underlying drivers that were conspicuous in this sector even before the pandemic. These issues have direct consequences for the manner in which the pandemic impacted the financial sector which is what we discuss next. Finally, we describe the way forward for the Indian credit landscape in terms of the major opportunities and challenges.
    Keywords: Banking sector, Credit ecosystem, Pandemic, Consumer credit, Bond market
    JEL: G21 G23 G28
    Date: 2022–12
  4. By: Indradeep Ghosh (Dvara Research); Susan Thomas (xKDR Forum)
    Abstract: The widely accepted view that finance is important to improve the lives of individuals has led to a tenacious policy support for financial inclusion. The term itself has evolved with time, and along with it, the approaches to measure financial inclusion. This paper in the 17th edition of the Inclusive Finance India Report ( describes the evolution of financial inclusion in India and the various strategies used to quantify so far. The paper presents new thinking on measuring financial inclusion, including the latest Findex measure from the World Bank and the holistic input-output-outcome approach by Dvara Research and XKDR Forum. While both approaches depend upon household surveys, the paper identifies gaps between the measurement focus of the Findex, which continues to focus on bank accounts and payment systems, and the Dvara-XKDR approach which incorporates a greater coverage of what the household holds as financial instruments, how they are used and the perceived well-being of households that are more financially included. The evidence presented suggests that the input-output-outcome can be more useful to both policy makers and financial service providers in identifying households that are financially less included.
    JEL: D1 G2 G5
    Date: 2023–01
  5. By: Mr. Fabio M Natalucci; Deepali Gautam; Rohit Goel
    Abstract: Sustainable finance has become a key focus area for global investors and policy makers. Last year proved to be a breakout year for emerging markets (EMs), with sustainable debt issuance in 2021 surging to almost $200 billion. This working paper, the first comprehensive study in the literature, analyzes the evoluiton of EM sustainable finance markets, including differences with advanced economies. The analysis shows how sustainable finance in EMs is growing fast not just in aggregate but importantly across many dimensions. The paper also identifies key development areas for EMs and policies to strengthen the resilience of sustainable finance markets.
    Keywords: Sustainable Finance; Emerging Markets; Sustainability; ESG; EM ESG market; finance market; AE ESG; ESG score; ESG indices; Financial sector; Climate finance; Corporate social responsibility; Emerging and frontier financial markets; Bonds; Climate change; Global
    Date: 2022–09–09

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