Regulating Over‐indebtedness: Local State Power in Cambodia's Microfinance Market

Green, W. Nathan

doi:10.1111/dech.12620

Cited by 24 publications

(22 citation statements)

References 40 publications

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“…He also stated that the Credit Reference Bureau (CRB) can be established sector-wise to avoid the issue of over-indebtedness and the detrimental impact of multiple borrowing on loan repayment performance. (W. N. Green, 2020). Multiple borrowing created severe loan repayment problems if the firms and banks are subject to moral hazard and monitoring of client for utilization of loan amount is essential.…”

Section: The Mediating Role Of Over-indebtedness On the Between Multiple Borrowing And Loan Repayment Performancesmentioning

confidence: 99%

Is Multiple Borrowing a Bad Sign? Evidence From Microfinance Institutions in Pakistan

Zahid

Akram

Ahmad

2021

HSSR

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Purpose: To improve the loan repayment performance of Microfinance Institutions (MFIs) in Pakistan, this research not only analyses the direct effect of multiple borrowing on loan repayment performance but also determining the indirect impact of multiple borrowing on loan repayment performance through the mediating role of over-indebtedness and moderate role of moral hazard between over-indebtedness and loan repayment performance. Design/methodology/approach: This study is based on a rich dataset comprised of information provided by the employees of MFIs working in Pakistan. The primary data were collected through the structural questionnaire, reliability and validity of construct were established in the light of different techniques including (1) Factor Loading (2) Cronbach’s Alpha (3) Composite Reliability (4) Average Variance Extracted (5) Variance Inflation Factor (6) Fornell-Larcker Criterion and (7) HTMT Ratio. Moreover, structural equation modeling techniques were applied in this study and, hypotheses were tested through bootstrapping by using PLS-SEM. Findings: The results confirm not the only direct impact of multiple borrowing on loan repayment performance and over-indebtedness but also mediating role of over-indebtedness between multiple borrowing and loan repayment performances. Aside from the direct influence of over-indebtedness on loan repayment performance, the moderate role of moral hazard on the association between over-indebtedness and loan payback was also found. Application of the Study: The findings of this study will be communicated with all Microfinance Institutions (MFIs) in the future so that policies may be developed to address the factors that negatively affect the loan repayment performance of Microfinance Institutions (MFIs). Besides this, the outcomes of this study will also enable the MFIs to launch different loaning products that not only fulfill the borrower’s requirements but also ensure the interest of MFIs. Originality/value: Until now, the impact of multiple borrowing on loan repayment performance through mediating role of over-indebtedness and moderating role of moral hazard in the context of Microfinance Institutions (MFIs) of Pakistan have hardly been investigated. This study also enhances the understanding of MFIs regarding multiple borrowing and its subsequent impact on loan repayment performance. Moreover, the findings of this study enable the MFIs of Pakistan to improve their loan repayment performance by formulating the new lending policies in light of the finding of this study with special reference to multiple borrowing.

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Section: The Mediating Role Of Over-indebtedness On the Between Multiple Borrowing And Loan Repayment Performancesmentioning

confidence: 99%

Is Multiple Borrowing a Bad Sign? Evidence From Microfinance Institutions in Pakistan

Zahid

Akram

Ahmad

2021

HSSR

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“…Also, who enforces loan contracts? (see Green, 2020). Different intermediaries propose different answers to these questions which are based on moral as well as practical considerations.…”

Section: Liquiditymentioning

confidence: 99%

“…To understand the impacts and mechanisms of financialization at a local scale, it is important to study financialization ‘from below’ (Ouma, 2014: 162) and to move beyond understandings of financialization as only ‘a vague notion of “the (increased) contemporary importance of finance”’ (Christophers, 2015: 184). There is a need to study the people and organizations constructing, creating and mediating investment opportunities (Green, 2020; Langford, 2020). These range from market mediators such as go‐betweens, consultants, distributors and evaluators (Bessy and Chauvin, 2013; Langford et al., forthcoming), to government bodies (Langford et al., 2020), to those intermediaries such as private equity firms and farmland fund managers involved in developing sophisticated investment products (Ducastel and Anseeuw, 2017).…”

Section: Introductionmentioning

confidence: 99%

Financialization for Development? Asset Making on Indigenous Land in Remote Northern Australia

Langford¹,

Lawrence²,

Smith³

2021

Development and Change

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Indigenous Australian landowners are increasingly seeking to develop agricultural production on their lands to improve the welfare and economic opportunities of their communities. This can require substantial capital input and, in the absence of enough government funding, Indigenous groups are turning to private investors. Development literature has explored private sector-led and 'financialized' approaches to development at a macro level as something that is done to communities; however, less research has examined how remote communities themselves seek to develop their natural assets through partnerships with businesses and with global finance. This article examines the work being done to prepare land for external investment. It provides an example of emergent assetization processes being undertaken outside the financial sector, driven by social outcomes seemingly beyond the domain of shareholder value. Paradoxically, individuals engaged in these asset-making processes may oppose the withdrawal of direct funding for community development associated with a financialization of development, yet they are left with few options but to further these efforts by seeking private finance themselves -facilitating financialization for development. This interaction of structural effects and local agency complicates narratives of financialization as they are commonly presented and has important implications for Indigenous economic development in Northern Australia.

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“…All registered MFIs report to Cambodia's credit bureau, making it possible to evaluate repayment capacity and see past repayment problems. Yet the glut of informal and unregistered lenders renders the credit bureau ineffective at determining repayment capacity (Green, forthcoming). And while most CASH borrowers have collateral‐based loans, it can be difficult for MFIs to effectively make claims on collateral.…”

Section: The Uses Of Financial Literacymentioning

confidence: 99%

“…And while most CASH borrowers have collateral‐based loans, it can be difficult for MFIs to effectively make claims on collateral. Fraudulent land titles are not uncommon, and in some cases village officials have been known to issue multiple land titles for the same plot of land (Green, forthcoming; Mahanty and Milne, 2016; Ovesen and Trankell, 2014). Moreover, as MFI executives shared with us, it is both costly and difficult for institutions to formally repossess land, and they suffer bad press in the process of doing so.…”

Section: The Uses Of Financial Literacymentioning

confidence: 99%

‘If You Fall, Stand Up Again’: The Moral Nature of Financial Literacy in the Global South

Bylander¹,

Res²

2020

Development and Change

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Over the past decade a range of development actors have begun to implement financial literacy training in low‐income countries. These programmes have become a key pillar of financial inclusion projects targeting the rural poor but, to date, they have received little scholarly attention. This article draws on ethnographic observation of two financial literacy programmes implemented by microfinance institutions in Cambodia to examine the current practices of financial education in the global South. The findings highlight that while financial literacy training purports to be a technical, skill‐building intervention aimed at enabling knowledge, its practices work primarily to impress upon borrowers moral lessons associated with creditworthiness, while also stressing individual responsibility for debt stress. In this way, it furthers the goals of financial providers, but fails to address the complex and real problems of debt stress. The authors suggest that financial literacy, at least where it is enacted by microfinance providers, is unlikely to moderate the problems of over‐indebtedness faced by rural borrowers.

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Regulating Over‐indebtedness: Local State Power in Cambodia's Microfinance Market

Cited by 24 publications

References 40 publications

Is Multiple Borrowing a Bad Sign? Evidence From Microfinance Institutions in Pakistan

Is Multiple Borrowing a Bad Sign? Evidence From Microfinance Institutions in Pakistan

Financialization for Development? Asset Making on Indigenous Land in Remote Northern Australia

‘If You Fall, Stand Up Again’: The Moral Nature of Financial Literacy in the Global South

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