Household bargaining and microfinance

Tassel, Eric Van

doi:10.1016/s0304-3878(04)00023-9

Cited by 9 publications

(11 citation statements)

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“…On the one hand, women may be regarded as riskier borrowers because of their limited repayment capacity (D'Espallier, Guérin, & Mersland, ; Hermes, Lensink, & Meesters, ). On the other hand, because women living in developing regions often have fewer opportunities to access financial services, they may be more inclined to repay, thus have higher repayment rates in order to continue to be financed (Hartarska et al., ; Van Tassel, ).…”

Section: Methods and Datamentioning

confidence: 99%

Is the model “loans‐plus‐savings” better for microfinance in Eastern Europe and Central Asia? A propensity score matching comparison

Khachatryan

Baghdasaryan

Hartarska

2019

Review Development Economics

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Microfinance institutions are gradually evolving into multiservice organizations offering not only loans but also savings, and other financial and nonfinancial services. We contribute to the literature aimed at identifying how combining credit with savings affects outreach and sustainability in microfinance institutions (MFIs). We apply the propensity score matching method as well as its augmented dose-response version to compare the performance of loans-plus-savings MFIs with that of lending-only in a sample of 710 observations from Eastern Europe and Central Asia. Owing to our unique capital structure data, we control for the use of subsidized capital, which related work ignores while existing evidence points to tradeoffs between subsidies and savings. We find that financial performance and breadth of outreach are positively associated with savings mobilization, while the evidence on depth of outreach points to a possible mission drift. J E L C L A S S I F I C A T I O NG21, F30, O16 K E Y W O R D S economies of scope, Microfinance institutions, performance, propensity score matching, savings | 1311 KHACHATRYAN eT Al.Szafarz, 2011), which creates new forms of exclusion, this question is important for policymakers, practitioners, and scholars. The third contribution is to the discussion on mission drift by establishing differences in depth of credit outreach between savings-offering and loan-only MFIs.We use panel data from 157 MFIs operating in 19 countries in the ECA region reported by individual MFIs in the Microfinance Information Exchange (MIX) over 5 years. The capital structure variables are collected from a unique database provided by a grass-root network Microfinance Centre (MFC) and available only for 2005 to 2009 period. This explains why our panel is limited to the given period of time. We apply semiparametric quasi-experimental PSM, as well as dose-response function approaches to estimate the impact of offering savings on financial sustainability and credit outreach of MFIs. Estimation of the dose-response function (Guardabascio & Ventura, 2014) provides an opportunity to take into account the continuous nature of treatment, which in our case is the relative share of deposits. In both settings we use data on capital structure of MFIs, operations profile (age, outreach direction, profit status, risk profile), and country level macro data.Our main findings suggest that the simultaneous delivery of loans and savings is associated with better financial performance measured by return on asset (ROA) by about 3 percentage points. We also find that MFIs offering savings service have over 5,000 more borrowers, likely owing to scale economies. At the same time, those MFIs offering savings seem to focus more on richer borrowers (have lower depth of outreach, measured by the average loan size divided by the country's gross national income (GNI) per capita). These results support the ideas for mission drift for savings-collecting MFIs in ECA region. We also note that in most countries in the region, only regulate...

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Section: Methods and Datamentioning

confidence: 99%

Is the model “loans‐plus‐savings” better for microfinance in Eastern Europe and Central Asia? A propensity score matching comparison

Khachatryan

Baghdasaryan

Hartarska

2019

Review Development Economics

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“…Analysts ask questions why the micro-financing programs are more affecting women, as well as why women are not treated the same as men (Tassel, 2004). International donations, governments and other experts for development pay more attention to microfinancing as a strategy that could reach women and engage them in the developmental process (Ali, Hatta, 2012).…”

Section: The Meaning Of the Female Entrepreneurship And Self-employmentmentioning

confidence: 99%

Self-employment of women through associations in the rural areas of Sirinicka Zupa

Maksimović

Ivanović

Vujko

2019

Ekonomika poljoprivrede

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In order to empower and become independent in their tending, women have established the associations (the associations for the empowerment of women-AEW). Women in these associations have becoming aware that, if they had performed united, they could radically change their personal lives, their families' lives, as well as of the communities they have lived in. Therefore, the associations can play a role of giving a woman "a chance" to be independent both in the economic and social sense. This paper aims to show effects of the women's empowerment in rural areas, i.e. the influence of the AEW on the female entrepreneurship and self-employment. Empirical research was done on a free sample of 420 women from 10 villages in the Serbian enclave Sirinicka Zupa in Kosovo and Metohija by the personal communication technique, i.e. using a questionnaire. The results analysis shows a unique formula for the empowerment of women: self-employment as a goal for the women's empowerment depends directly from the motive for starting a business (25%), business environment (20.24%), as well as the support of AEW (54.76%).

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“…One of the most important components of X i is social networks, which may influence credit behavior through multiple channels. These include the provision of funds if borrowers face a negative shock (Van Tassel ), the mitigation of information costs and enhanced access to informal lenders (Okten and Osili ; Laszlo and Santor ; Wydick, Hayes, and Kempf ), and the provision of peer monitoring and sanctions, which increase the costs of default (Karlan ; van Bastelaer and Leathers ; Cassar and Wydick ). Ideally to measure social networks we would have information on the quantity and quality of informal contacts.…”

Section: The Determinants Of Dropout Default and Continued Borrowingmentioning

confidence: 99%

“…The channels through which marital status operates are twofold. First, spouses may provide liquidity services or enhanced access to social networks that can provide these services in the case of repayment difficulties (Van Tassel ). Second, better borrowers or those with higher skill may be more attractive mates and therefore are more likely to be married.…”

Section: Estimating Loan Repaymentmentioning

confidence: 99%

Dropouts, Defaulters, and Continuing Borrowers: Client Exit from Microfinance

Pearlman

2014

The Developing Economies

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High dropout rates are a problem faced by many microfinance institutions, with borrowers exiting after a few loans. The curiosity of dropouts is that, unlike defaulters, they repay their loans. To understand this I investigate differences across borrowers using data from Zimbabwe. I find that negative shocks are a significant predictor of dropout, but not of default, and that social networks are the most important correlate of on-time repayment. The results show the importance of social networks in determining credit relationships.

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Household bargaining and microfinance

Cited by 9 publications

References 0 publications

Is the model “loans‐plus‐savings” better for microfinance in Eastern Europe and Central Asia? A propensity score matching comparison

Is the model “loans‐plus‐savings” better for microfinance in Eastern Europe and Central Asia? A propensity score matching comparison

Self-employment of women through associations in the rural areas of Sirinicka Zupa

Dropouts, Defaulters, and Continuing Borrowers: Client Exit from Microfinance

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