nep-mfd New Economics Papers
on Microfinance
Issue of 2023‒05‒08
seven papers chosen by
Aastha Pudasainee and

  1. The role of mobile money innovations in transforming unemployed women to self-employed women in sub-Saharan Africa By Simplice A. Asongu; Sara le Roux
  2. Microfinance institutions and female entrepreneurship in Sub-Saharan Africa: avoidable female unemployment thresholds By Simplice A. Asongu; Nicholas M. Odhiambo
  3. Bank accounts, bank concentration and mobile money innovations By Simplice A. Asongu; Nicholas M. Odhiambo
  4. Social Entrepreneurship as a Tool to Promoting Sustainable Development in Low-Income Communities: An Empirical Analysis By Sauermann, Miklas Pascal
  5. Can social inclusion policies promote financial inclusion? By Ozili, Peterson K
  6. Portuguese Households Savings in Times of Pandemic: A Way to Better Resist the Escalating Inflation? By Ana Lucia Luis; Natalia Teixeira; Rui Braz
  7. The SME-lender relationship network in Ireland By Gaffney, Edward; McGeever, Niall

  1. By: Simplice A. Asongu (Yaounde, Cameroon); Sara le Roux (Oxford Brookes University, Oxford, UK)
    Abstract: The study examines how mobile money innovations transform unemployed women to self-employed women. The empirical evidence is based on interactive quantile regressions focusing on data in 44 countries from sub-Saharan Africa for the period 2004 to 2018. The hypothesis that mobile money innovations transform female unemployment to female self-employment is tested. Eight mobile money innovation dynamics presented in four categories are employed. Three main common findings are apparent from interactions between female unemployment, eight mobile money innovation dynamics and female self-employment: (i) the investigated hypothesis is valid exclusively at the top quantiles of female self-employment; (ii) the net effects are consistently negative and (iii) the corresponding conditional or interactive effects upon which the net effects are based are consistently positive. This is an indication that critical masses at which money innovation innovations have an overall positive net effect on female self-employment are apparent. The corresponding mobile money innovation policy thresholds at which the net effects on female self-employment change from negative to positive are provided. Policy implications are discussed.
    Keywords: Mobile phones; financial inclusion; women; inequality; sub-Saharan Africa
    JEL: G20 O40 I10 I20 I32
    Date: 2023–01
  2. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The present study contributes to the extant literature by assessing how microfinance institutions (MFIs) affect female entrepreneurship, contingent on female unemployment levels. The study focuses on 44 countries in sub-Saharan Africa (SSA) for the period 2004 to 2018. The empirical evidence is based on interactive quantile regressions, which put emphasis on nations with high, low and intermediate levels of business constraints. The analysis is tailored to provide avoidable female unemployment levels in the implementation of policies designed for MFIs to promote female business ownership. The hypotheses that MFIs are favorable for female business owners and some critical rates of female unemployment should be avoided in order for the favorable incidence to be maintained is exclusively valid in the 10th quantiles of the cost of business by females and time to start-up a business by females. Policy implications are discussed. This study has complemented the extant literature by providing actionable female unemployment critical masses that governments can act upon in tailoring the nexus between the relevance of MFIs in the doing of business by females.
    Keywords: Africa; Microfinance; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2023–01
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The present study investigates how increasing bank accounts and bank concentration affect mobile money innovations in 148 countries. It builds on scholarly and policy concerns in the literature that increasing bank accounts may not be having the desired effects on financial inclusion on the one hand and on the other, that bank concentration which is a proxy for market power is a relevant mobile money innovation demand factor. The empirical evidence is based on Tobit regressions. From the findings, it is apparent that boosting bank accounts is positively related to the three mobile money innovations (i.e. mobile bank accounts and the mobile phone used to send money). Moreover, some critical levels of bank account penetration require complementary policies in order to maintain the positive relationship between boosting bank accountsand positive outcomes in terms of money mobile innovations.Conversely, financial inclusion in terms of the three mobile money innovations is not significantly apparent upon enhancing bank concentration. Policy implications are discussed in the light of the provided thresholds for complementary policies.
    Keywords: Mobile money; technology; diffusion; financial inclusion; inclusive innovation, information asymmetry
    JEL: D10 D14 D31 D60 O30
    Date: 2023–01
  4. By: Sauermann, Miklas Pascal
    Abstract: Social entrepreneurship has emerged as a critical driver for promoting sustainable development in low-income communities facing pressing social and environmental challenges. However, the factors that contribute to the success of such initiatives and the obstacles faced by social entrepreneurs remain poorly understood. This study employs a mixed-methods approach, drawing on data collected from surveys of 60 community members and interviews with 20 social entrepreneurs operating in low-income communities to examine the role of social entrepreneurship in fostering sustainable development. The results reveal that successful social entrepreneurship initiatives in low-income communities require strong leadership, community engagement, funding accessibility, and adaptability. Moreover, social entrepreneurship has the potential to advance sustainable development through the provision of innovative solutions to complex social and environmental problems, the promotion of local economic development, and the enhancement of community resilience. However, the study also highlights several challenges social entrepreneurs face in low-income communities, including navigating complex regulatory environments, securing funding, and establishing community trust. Addressing these obstacles requires collaboration between social entrepreneurs, policymakers, and other stakeholders, as well as the development of tailored support mechanisms that address the unique needs of social entrepreneurship initiatives.
    Keywords: Social Entrepreneurship, Sustainable Development, Low-Income Communities, Impact Assessment
    JEL: L31 Q01
    Date: 2023–03–27
  5. By: Ozili, Peterson K
    Abstract: This study investigates whether social inclusion policies promote financial inclusion. Three social inclusion policies were analyzed: gender equality policies, environmental sustainability policies and social protection policies. The study used the panel fixed effect regression methodology to analyse data from 48 low- and medium-income countries. It was found that social inclusion policies did not have a significant effect on financial inclusion, implying that social inclusion policies do not promote financial inclusion. The older population are less likely to own an account at a formal financial institution in low and medium-income countries that have strong environmental sustainability policies and institutions. The implication of the finding is that the social policies and institutions established to promote environmental sustainability can discourage the older population from keeping their wealth in formal financial institutions.
    Keywords: financial inclusion, social inclusion, financial development, social policies, institutions.
    JEL: D60 G21 Z0 Z13
    Date: 2023
  6. By: Ana Lucia Luis; Natalia Teixeira; Rui Braz
    Abstract: March 2020 confinement has shot Portuguese savings to historic levels, reaching 13.4% of gross disposable income in early 2021 (INE, 2023). To find similar savings figures we need to go back to 1999. With consumption reduced to a bare minimum, the Portuguese were forced to save. Households reduced spending more because of a lack of alternatives to consumption than for any other reason. The relationship between consumption, savings, and income has occupied an important role in economic thought [(Keynes, 1936; 1937); (Friedman, 1957)]. Traditionally, high levels of savings have been associated with benefits to the economy, since financing capacity is enhanced (Singh, 2010). However, the effects here can be twofold. On the one hand, it seems that Portugal faced the so-called Savings Paradox (Keynes, 1936). If consumers decide to save a considerable part of their income, there will be less demand for the goods produced. Lower demand will lead to lower supply, production, income, and, paradoxically, fewer savings. On the other hand, after having accumulated savings at the peak of the pandemic, the Portuguese are now using them to carry out postponed consumption and, hopefully, to better resist the escalating inflation. This study aims to examine Portuguese households' savings evolution during the most critical period of the pandemic, between March 2020 and April 2022. The methodology analyses the correlation between savings, consumption, and GDP as well as GDP's decomposition into its various components and concluded that these suddenly forced savings do not fit traditional economic theories of savings.
    Date: 2023–04
  7. By: Gaffney, Edward (Central Bank of Ireland); McGeever, Niall (Central Bank of Ireland)
    Abstract: In this Note, we examine the relationship between non-bank lenders and Irish small and medium enterprises (SMEs). We review the relevance of non-bank lending to financial stability. We then describe the SME-lender relationship network in Ireland. We find that 36 per cent of SME company borrowers owe money to a non-bank lender, with 15 per cent borrowing exclusively from nonbanks and 21 per cent borrowing from both banks and non-banks. We also show that 71 per cent of borrowers have only one lender. Finally, we characterise the firms that rely on non-bank lenders for credit. We find that SMEs that borrow from non-banks are younger, less liquid, and have higher leverage than SMEs that borrow from banks.
    Date: 2022–11

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