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on Microfinance |
| By: | Preziuso, Massimo; Koefer, Franziska; Ehrenhard, Michel |
| Abstract: | In the European Union (EU), the revised Payment Services Directive (PSD2) aims to provide more convenient and customized financial products through open banking (OB) platforms. However, little attention has been paid to the role of OB in improving the financial well-being of the growing number of the EU's underserved groups, which currently constitute approximately a quarter of its population. This study examines how the PSD2 and OB impact inclusive finance in the EU based on the perspectives of the Netherlands' ecosystem, one of the leaders in the EU's financial technology (FinTech) landscape. A fundamental distinction can be drawn between the OB users and the ecosystem's players. Regarding the impact of financial services on the users' inclusivity, while the PSD2 strengthens the infrastructure necessary for financial inclusion, many challenges remain, mainly because it was not designed for this purpose. This study identifies several areas of improvement that include adjustments to the know your customer (KYC) and anti-money laundering (AML) processes for underserved customers, innovative ways to communicate the PSD2's potential, and the regulation of technology providers' activities to build trust. Meanwhile, from the ecosystem's position, there is a need to strengthen and improve microfinance regulation according to the opportunities provided by the PSD2 to support microfinance institutions (MFIs) in scaling up and reaching underserved clients across borders with innovative services. OB improvements can also be achieved by organizations formed by MFIs and FinTechs in collaboration with banks. Such hybrid institutions will combine the best features of each of them: knowledge of the needs of local underserved clients from MFIs, technological innovations from FinTechs, and large and trusted customer bases, infrastructures, and access to institutional investments and governments from banks. Finally, an EU inclusive OB sector depends on the centrality of trusted regulators as coordination bodies. |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eifwps:279536 |
| By: | François Fall; Thanh Tam Nguyen-Huu (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie) |
| Abstract: | In Hotelling's fundamental model (1929), the geographical distance and high transportation costs grant firms present in a market a certain power over local buyers in their neighborhoods. Starting from his model, this study shows that in the competition between a bank and a microfinance institution (MFI), geographical distance and transportation costs alone are no longer sufficient for attributing market power to the firms present. In fact, the introduction of psychological distanceand education level in the model alter the Hotelling's results. Psychological proximity (trust) and the educational level of the client play determinant roles in dividing the credit market between a bank and an MFI. |
| Keywords: | C72, D43, spatial competition bank microfinance market power G21 O17 C72 D43, spatial competition, bank, microfinance, market power G21, O17 |
| Date: | 2022–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04248194 |
| By: | Malabayabas, Maria Luz L. (University of the Philippines, Los Banos); Mishra, Ashok K. (Arizona State University); Mayorga, Joaquin (Daniel J. Evans School of Public Policy and Governance) |
| Abstract: | The study investigates the effect of the spouse's access to financial services (credit or savings) through membership in a self-help group on adopting technology, technical efficiency, and managerial gaps. To estimate the empirical model, we use farm-level data from rice farming households in eastern India, propensity score matching method, and selectivity-corrected stochastic production frontier. Results show that families with access to financial services via a spouse's membership in self-help groups have slightly higher technical efficiency than their counterparts. Both technology and managerial gaps are higher for farms where spouses have access to financial services via SHGs than their counterparts. With access to financial services via spouses, rice farmers used more hired labor, about 1.3 person-days/ha for crop establishment. Thus, women joining self-help groups can increase farm productivity, and extension agents should also focus on spouses and their role in farming decision-making, not just financial management. |
| Keywords: | self-help group, PSM, selection-correction SPF, production efficiency, hired labor |
| JEL: | C21 Q12 Q16 Q55 R58 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp16578 |
| By: | Cita Puspita Sari (The Central Agency of Statistics for Bandar Lampung Municipality); Eny Sulistyaningrum (Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada) |
| Abstract: | This study examines the impact of digitalization on access to household credit during the National Economic Recovery Program. Data from the National Socioeconomic Survey (Survei Sosial Ekonomi Nasional/Susenas) and Village Potential Statistics (Potensi Desa/Podes) from 2019 (pre-pandemic) and 2021 (one year post-pandemic) are used in this research. Using the binomial logit model-fixed effect, this research found that digitalization has a significant impact on access to household credit, both before and during the COVID-19 pandemic. The majority of households with access to credit are headed by males living in rural areas, who are married, working, graduated from junior high school or above, and are 30-59 years old. In line with the national economic recovery program, the government can accelerate financial inclusion by increasing access to household credit to all levels of the society without gender discrimination through banking digitalization. |
| Keywords: | Digitalization, Credit Access, Financial Inclusion, Logit, Pandemic |
| JEL: | G5 G2 O1 E5 O3 |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:gme:wpaper:202303002 |
| By: | Ferrari, Alessandro; Loseto, Marco |
| Abstract: | Using administrative data on mortgages issued in Italy between 2018 and 2019, this paper estimates loan demand elasticities to maturity and interest rate. We findthat households are responsive to both contract terms: a 1% decrease in interestrate increases the average loan size by 0.22% whereas a commensurable increasein maturity increases loan demand by 0.30%. This evidence suggests that creditconstraints are relevant in this market. Things change substantially when movingalong the distribution of contract maturities: short term borrowers are unresponsive to their contract lengthwhile maturity elasticities are higher for long term borrowers. JEL Classification: D12, D14, D15, G11, G51 |
| Keywords: | credit demand, household finance, maturity, mortgage |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20232859 |
| By: | Bednarek, Peter; Briukhova, Olga; Ongena, Steven; von Westernhagen, Natalja |
| Abstract: | What is the impact of a sudden and sizeable increase in bank capital requirements on the lending activity by directly affected banks and by non-affected non-bank financial institutions (NBFIs)? To answer this question, we apply a difference-in-differences methodology around the capital exercise by the European Banking Authority (EBA) in 2011 with German credit register data. We find that insurance companies, financial enterprises, and factoring companies - but not leasing companies - and Non-EBA banks expand their corporate lending relative to EBA banks. In particular, NBFIs use the opportunity to expand their credit activities, in riskier and more competitive borrower segments, but NBFIs do not seem to rely on increased bank funding to finance this expansion. |
| Keywords: | non-bank financial intermediation, bank capital requirements, EBA capital exercise |
| JEL: | E50 G21 G23 G28 C33 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:279547 |