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on Microfinance |
| By: | Awojobi, Omotola; Bein, Murad |
| Abstract: | The main focus of this research is to juxtapose the features of microfinancing and the institutional forbearance of economic development in Nigeria. Based on empirical study, it has been observed that poverty is multifaceted and its persistence is due to lack of productive resources. The Nigerian case reveals that the major constraint to improving the standard of living of the poor is capital (finance). This has restricted their extensive participation in economic activities which could improve their lives. For this study, our theoretical a priori expectation is that provision of microfinance services such as savings and microloans have direct impact on GDP. A causal relationship will be established and evaluated with the ‘t-test’ statistic, while the relevance of the independent variables in explaining the subject will be justified based on the F-statistic test and R2 coefficient of multi-determination. Also, using a lin-log regression model, economic growth shall be regressed on poverty level in Nigeria. This will create an assertion whether Nigeria needs a systematic reinforcement of the microfinance mechanism to propagate a soothing trend for poverty reduction and economic growth. |
| Keywords: | Microfinance; Poverty; Economic Development; Economic Growth; Financial Services; Gross Domestic Product |
| JEL: | O17 I38 G21 |
| Date: | 2010–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33530&r=mfd |
| By: | Xavier Giné; Jessica Goldberg; Dean Yang |
| Abstract: | We report the results of a randomized field experiment that examines the credit market impacts of improvements in a lender's ability to determine borrowers’ identities. Improved personal identification enhances the credibility of a lender’s dynamic repayment incentives by allowing it to withhold future loans from past defaulters and expand credit for good borrowers. The experimental context, rural Malawi, is characterized by an imperfect identification system. Consistent with a simple model of borrower heterogeneity and information asymmetries, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest of the borrowers. The change in repayment rates is driven by reductions in adverse selection (smaller loan sizes) and lower moral hazard (for example, less diversion of loan-financed fertilizer from its intended use on the cash crop). |
| JEL: | O12 O16 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17449&r=mfd |
| By: | Beck, Thorsten; Demirguc-Kunt, Asli; Singer, Dorothe |
| Abstract: | Combining two unique data sets, this paper explores the relationship between the relative importance of different financial institutions and their average size and firms'access to financial services. Specifically, the authors explore the relationship between the share in total financial assets and average asset size of banks, low-end financial institutions, and specialized lenders, on the one hand, and firms'access to and use of deposit and lending services, on the other hand. Two findings stand out. First, the dominance of banks in most developing and emerging markets is associated with lower use of financial services by firms of all sizes. Low-end financial institutions and specialized lenders seem particularly suited to ease access to finance in low-income countries. Second, there is no evidence that smaller institutions are better in providing access to finance. To the contrary, larger specialized lenders and larger banks might actually ease small firms'financing constraints, but only at low levels of gross domestic product per capita. |
| Keywords: | Access to Finance,Banks&Banking Reform,Debt Markets,Microfinance,Non Bank Financial Institutions |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5806&r=mfd |
| By: | Ravallion, Martin |
| Abstract: | Randomized control trials are sometimes used to estimate the aggregate benefit from some policy or program. To address the potential bias from selective take-up, the randomization is used as an instrumental variable for treatment status. Does this (popular) method of impact evaluation help reduce the bias when take-up depends on unobserved gains from take up? Such"essential heterogeneity"is known to invalidate the instrumental variable estimator of mean causal impact, though one still obtains another parameter of interest, namely mean impact amongst those treated. However, if essential heterogeneity is the only problem then the naïve (ordinary least squares) estimator also delivers this parameter; there is no gain from using randomization as an instrumental variable. On allowing the heterogeneity to also alter counterfactual outcomes, the instrumental variable estimator may well be more biased for mean impact than the naïve estimator. Examples are given for various stylized programs, including a training program that attenuates the gains from higher latent ability, an insurance program that compensates for losses from unobserved risky behavior and a microcredit scheme that attenuates the gains from access to other sources of credit. Practitioners need to think carefully about the likely behavioral responses to social experiments in each context. |
| Keywords: | Poverty Monitoring&Analysis,Disease Control&Prevention,Poverty Impact Evaluation,Scientific Research&Science Parks,Science Education |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5804&r=mfd |