Relative Price Stability, Creditor Rights, and Financial Deepening

Druck, Pablo; Plekhanov, Alexander; Dehesa, Mario

doi:10.5089/9781451867039.001

Cited by 7 publications

(1 citation statement)

References 17 publications

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“…The law and finance literature has stressed the importance of legal institutions (especially those protecting private property rights) in explaining international differences in financial development. Where legal systems enforce private property rights, support private contracts, and protect the legal rights of investors, lenders tend to be more willing to finance firms -in other words, stronger creditor rights tend to promote financial development (see Acemoglu and Johnson, 2005, Cottarelli et al, 2003, Dehesa et al, 2007, McDonald and Schumacher, 2007, Tressel and Detragiache, 2008, and Singh et al, 2009.…”

Section: Theoretical Background and Review Of The Literaturementioning

confidence: 99%

Financial Deepening, Property Rights and Poverty: Evidence from Sub-Saharan Africa

Yi-fei

Singh²

2011

SSRN Journal

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Recent studies on the relationship between financial development and poverty have been inconclusive. Some claim that, by allowing more entrepreneurs to obtain financing, financial development improves the allocation of capital, which has a particularly large impact on the poor. Others argue that it is primarily the rich and politically connected who benefit from improvements in the financial system. This paper looks at a sample of 37 countries in sub-Saharan Africa from 1992 through 2006. Its results suggest that financial deepening could widen income inequality and increase poverty, if not accompanied by stronger property rights. Similarly, interest rate and lending liberalization alone could be detrimental to the poor without institutional reforms, in particular stronger property rights and wider access to credit information.

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Section: Theoretical Background and Review Of The Literaturementioning

confidence: 99%

Financial Deepening, Property Rights and Poverty: Evidence from Sub-Saharan Africa

Yi-fei

Singh²

2011

SSRN Journal

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Microfinancial inclusion nexus poverty alleviation: the case of Nigeria

Ngong

Thaddeus

Onwumere

2021

JEAS

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PurposeThis research examines the long-run relationship between microfinancial inclusion and poverty alleviation in Nigeria from 1990 to 2018.Design/methodology/approachthe Engle–Granger two-step co-integration and autoregressive distributed lag (ARDL) techniques. Gross domestic product (GDP) per capita proxies poverty reduction. Number of microfinance banks, borrowers of microfinance institutions, commercial bank branches, commercial bank loan to small-scale businesses and broad money supply ratio measure microfinancial inclusion.FindingsThe results indicate a long-run relationship between microfinancial inclusion and poverty reduction. The error correction model reveals that microfinancial inclusion and poverty alleviation converge to long-run equilibrium. The number of microfinance banks, lagged value of borrowed funds and broad money supply negatively influences poverty while the lagged values of number of microfinance banks and broad money supply positively influence poverty.Research limitations/implicationsEffective ways to improve microcredit channels and liquidity flow to the poor through a microfinance bank's intermediation should be promoted by the Central Bank of Nigeria (CBN) using an aggressive policy, which provides access to credit to the poor.Practical implicationsTheoretically, microfinance institutions should increase credit to the poor, especially in rural areas at moderate cost. This study further suggests that many microfinance bank branches should be located in urban and rural areas targeting the poor.Social implicationsMicrofinancial inclusion reduces population's poverty in Nigeria and globally.Originality/valueContrary to other studies, this paper utilizes number of microfinance institutions and borrowers of microfinance institutions to examine the relationship between microfinancial inclusion and poverty alleviation in Nigeria.

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Exploring exchange rate based policy coordination in SADC

Zerihun

Breitenbach

Kemegue³

2016

SEF

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Purpose This paper explores the possibilities for policy coordination in the Southern African Development Community (SADC) as well as real effective exchange rate (REER) stability as a prerequisite towards sensible monetary integration. The underlying hypothesis goes with the assertion that countries meeting optimum currency area conditions face more stable exchange rates. Design/methodology/approach The quantitative analysis encompasses 12 SADC member states over the period 1995-2012. Correlation matrixes, dynamic pooled mean group (PMG) and mean group (MG) estimators and real effective exchange rate (REER) and real exchange rate (RER) equilibrium and misalignment analysis are carried out to arrive at the conclusions. Findings The study finds that the structural variables used in the PMG model show that there are common fiscal and monetary policy variables that determine REER/RER in the region. However, the exchange rate equilibrium misalignment analysis reveals that SADC economies are characterised by persistent overvaluation at least in the short term. This calls for further sustained policy coordination in the region. Practical implications The findings in this paper have important policy implications for economic stability and for the attempt of policy coordination in SADC region for the proposed monetary integration to proceed. Originality/value This study is the first attempt that relates the exchange rate as a policy coordination instrument among SADC economies.

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Relative Price Stability, Creditor Rights, and Financial Deepening

Cited by 7 publications

References 17 publications

Financial Deepening, Property Rights and Poverty: Evidence from Sub-Saharan Africa

Financial Deepening, Property Rights and Poverty: Evidence from Sub-Saharan Africa

Microfinancial inclusion nexus poverty alleviation: the case of Nigeria

Exploring exchange rate based policy coordination in SADC

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