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on Microfinance |
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Issue of 2025–06–30
three papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Anastasia Cozarenco; Ariane Szafarz |
| Abstract: | There is a growing focus on the issue of inequitable lending practices. It has been demonstrated that institutions with a social mission are not exempt from the potential for negative bias. This paper contributes to the existing literature in two ways. First, we present a theoretical framework for elucidating the nature of bias for mission-driven lenders, who prioritize lending to specific disadvantaged groups. This framework clarifies the distinction between discrimination, which is defined with respect to ethical principles, and mission drift, which is associated with a specific social mission. This classification helps to rigorously assess the nature of identified biases. Second, we test for bias in lending outcomes using data from a European microfinance organization (MFO), with a social mission to prioritize unemployed loan applicants. The findings suggest that the mission-driven lender is subject to both discrimination and mission drift. The results indicate the presence of two discriminatory biases: (i) against women holding European Union (EU) citizenship in comparison to EU men, and (ii) against unemployed women in comparison to unemployed men. The evidence of mission drift stems from the negative bias against unemployed women in comparison to employed women. These three biases are consistent with unconscious gender stereotypes. The theoretical and managerial implications of these findings are discussed in the conclusion, along with avenues for further research, particularly in the detection of bias in fintech lending. |
| Keywords: | Ethical finance; Discrimination in Lending; Mission Drift; Gender; Migrants; Unemployed |
| JEL: | C12 C44 J15 J16 G21 D63 |
| Date: | 2025–06–20 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/391728 |
| By: | Ibrahim Hanafy Mohammad, Hind |
| Abstract: | Social cash transfers (SCTs) are considered a priority in least-developed countries, where the gap between the need for basic social protection and existing provisions is greatest. This study represents one of the first comprehensive impact evaluation treatments for Takaful and Karamah social cash transfer programs in Egypt. The results, based on propensity score matching (PSM) and odds-weighted regression, and data from the HIECS 2017-2018, confirm positive SCTs effects on per capita non-food consumption expenditures including healthcare and education for beneficiary households. The results also indicate threshold effects with SCTs mostly impacting healthcare expenditure among asset-poorer beneficiary households and education expenditure among asset-wealthier beneficiaries. |
| Keywords: | Social cash transfers, impact evaluation, consumption expenditure, propensity score matching, odds-weighted regression |
| JEL: | I38 O2 D63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:319784 |
| By: | Samiha Tariq; Weikang Zhang |
| Abstract: | This study explores the interdependent relationship between consumer credit and consumer confidence in the United States using monthly data from January 1978 to August 2024. Utilizing a Vector Error Correction Model (VECM), the analysis focuses on the interplay between household borrowing behaviour and consumer sentiment while controlling for macroeconomic factors such as interest rates, inflation, unemployment, and money supply. The results reveal a stable long-run equilibrium: heightened consumer confidence is associated with increased credit utilization, reflecting greater financial optimism among households. In the short run, shifts in consumer confidence exert relatively modest immediate influence on credit usage, whereas consumer credit adjusts slowly, displaying significant inertia. Impulse-response analysis confirms that shocks to consumer confidence generate sustained positive effects on borrowing, while unexpected increases in credit initially depress sentiment but only fleetingly. These findings underscore the critical role of the relationship between consumer confidence and credit-market dynamics and highlight its policy relevance for fostering balanced and stable household finances. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.21832 |