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on Microfinance |
| By: | Hisako, KAI; Shigeyuki, HAMORI |
| Abstract: | This paper examines the relationship microfinance and inequality by providing a cross-country empirical study of 61 developing countries. Microfinance plays an important role in the financial market in many developing countries. Although microfinance is expected to significantly affect macro variables, we lack enough empirical research on Impact Analysis at the macro level, such as the effect of microfinance on inequality. We expect microfinance to have an equalizing effect, and provide a first detailed cross-country empirical analysis in this regard. We find that microfinance can lower inequality, and poorer countries need to focus more on the equalizing effect of microfinance. |
| Keywords: | Microfinance; Inequality; Impact Analysis at Macro Level |
| JEL: | O11 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17537&r=mfd |
| By: | Andreas Madestam (Bocconi University) |
| Abstract: | I study the coexistence of formal and informal finance in underdeveloped credit markets. While weak institutions constrain formal banks, shallow pockets hamper informal lenders. In such economies, informal finance has two effects. By increasing the investment return it decreases borrowers’ relative payoff following default, inducing banks to lend more liberally (disciplinary effect). By channeling bank capital it reduces banks’ agency costs from lending directly to borrowers, limiting banks’ extension of borrower credit (rent-extraction effect). Among other things, the model shows that informal interest rates are higher, borrower welfare lower, and informal finance more prevalent when the rent-extraction effect prevails, consistent with stylized facts in poor societies. |
| Keywords: | Credit Markets, Financial Development, Institutions, Market Structure |
| JEL: | O12 O16 O17 D40 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.69&r=mfd |
| By: | Cull, Robert; Scott, Kinnon |
| Abstract: | In recent years, the number of surveys of access to and use of financial services has multiplied, but little is known about whether the data generated are comparable across countries, or within the same country over time. This paper reports results from a randomized experiment in Ghana to test whether the identity of the respondent and the inclusion of product-specific cues in questions affect the reported rates of household usage of financial services. The analysis shows that rates of household usage are almost identical when the head reports on behalf of the household and when the rate is tabulated from a full enumeration of household use. Randomly selected informants (i.e., non-heads of the household) provide a less complete summary of household use of financial services than the other two methods. The findings also show that for credit from formal institutions, informal sources of savings, and insurance, usage rates are higher when questions are asked about specific financial products rather than about the respondent’s dealings with types of financial institutions. In short, who is asked the questions and the form in which they are asked both matter. |
| Keywords: | Access to Finance,,Banks&Banking Reform,Housing&Human Habitats,Emerging Markets |
| Date: | 2009–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5048&r=mfd |