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on Microfinance |
| By: | Mader, Anna; Musshoff, Oliver |
| Abstract: | Increased access to finance is widely viewed as a key driver to increase adaptive capacity in response to climate change. However, apart from limited studies on borrowing behavior, little is known about how exposure to extreme heat impacts microfinance clients’ financial behavior. This study addresses this gap by investigating the short-run effects of unusual heat on microfinance clients’ saving and withdrawal behavior. In a case study, it combines geo-located temperature data with a unique dataset of around 50, 000 clients of a leading Microfinance Institution (MFI) in Benin. Applying two-way fixed effects, seemingly unrelated regression, and ordinary least square models, the study finds that exposure to extreme heat is heterogeneously associated with microfinance clients’ financial behavior. Specifically, non-agricultural clients show suggestive evidence for the accumulation of precautionary savings after extreme heat days in the precedent quarter, while agricultural clients statistically significantly reduce their savings following exposure to extreme heat in the precedent quarter. Microfinance clients increase their withdrawals when exposed to extreme heat within the precedent quarter, but the association is not robust to agricultural clients’ withdrawals in response to an increase in annual extreme heat days. Addressing the heterogeneous financial responses across different clients to extreme heat consequently requires explicit policy attention. Our findings contribute to a better understanding of the impact of extreme weather events on individual economic outcomes, how financial behavior relates to weather risk, and how microfinance clients respond to shocks. |
| Keywords: | International Development |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404654 |
| By: | Sanoh Yusuf (Graduate School of Economics, The University of Osaka) |
| Abstract: | This study investigates the causal impact of financial inclusion on household welfare in West Africa by analyzing consumption diversification using Living Standards Measurement Study (LSMS) data from the World Bank on 51, 851 households across seven countries of the West African Economic and Monetary Union (WAEMU). Instrumental Variables (IV) and Propensity Score Matching (PSM) were used for causal inference. The findings show that financial inclusion operates through distinct channels: it promotes food expenditure concentration via quality upgrading, expands non-food consumption into areas such as education and health, and induces structural reallocation from food to non-food budgets, with effects varying by financial modality. The results demonstrate that formal banking and microfinance drive long-term structural change. In contrast, mobile banking primarily facilitates short-term liquidity, offering targeted policy insights for enhancing financial inclusion strategies in the region. |
| Keywords: | Financial Inclusion, Theil entropy, consumption diversification, welfare, West Africa. |
| JEL: | G21 O16 I32 D12 O55 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:osk:wpaper:2610 |
| By: | Goeb, Joseph; Minten, Bart; Aung, Nilar; Ei Win, Hnin |
| Abstract: | Access to timely credit is widely viewed as an important determinant of improved agricultural investment and productivity. However, little is known about how agricultural credit markets function during prolonged conflict. This paper examines how conflict shapes both the receipt of agricultural credit and the provision of informal credit by agrifood businesses in Myanmar, where conflict has been widespread in after 2021. Using rare data from both farmers and firms, we document a substantial decline in formal credit after conflict, but stable receipt of informal credit. In conflict-affected areas, formal credit receipt declined sharply – most notably from government-supported schemes and from microfinance institutions – while informal credit was more resilient – especially from friends and family and agribusinesses. Using direct elicitation methods of credit constraint classifications, we show that farmers in high conflict areas are more likely to voluntarily withdraw from credit markets and shift to self-financing. On the supply side, conflict has insignificant relationships to farm-credit provision by input retailers and rice mills. Taken together, our findings highlight the informal segment of agricultural credit markets as an underappreciated source of resilience in conflict-affected settings. |
| Keywords: | credit; conflicts; agricultural credit; access to finance; investment; Myanmar; Asia; South-eastern Asia |
| Date: | 2026–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprwp:183542 |