Rural transformation, inequality, and the origins of microfinance

Suesse, Marvin; Wolf, Nikolaus

doi:10.1016/j.jdeveco.2019.102429

Cited by 22 publications

(8 citation statements)

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“…Moneylenders dare provide cash fast, available at any time, blend in with the community, simple administration process, serve small loans in short terms and offer daily repayments [6], [40]. Suesse and Wolf [41] decided to enter an MFI depending on existing informal loans, and Sangeetha and Chitra [42] that interest rates are one of the impacts of competition between MFIs and money lenders on market outcomes. As a result, poor people involved in moneylender loans are limited in participating and benefiting from the development opportunities [5], [35].…”

Section: B Analysis Of Efas (External Factors Analysis Summary) or Ef...mentioning

confidence: 99%

Strategy in Developing Microfinance Institution to Support Beef Cattle Farming Business in Rural Areas

Asnawi¹,

Amrawaty²,

Nirwana³

2023

Int. J. Adv. Sci. Eng. Inf. Technol.

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Microfinance Institution (MFIs) as informal financing institution has a big role in supporting the farmers' access to finance. This research was conducted to analyze the strategy for developing MFIs to support beef cattle farming. The instrument employed was a questionnaire delivered through a google form. In addition to questionnaires, interviews were also performed directly with key informants. Furthermore, FGDs and online seminars were conducted to formulate strategies for developing MFIs which were attended by stakeholders, including relevant government agencies, the Head of the Agricultural Extension Center, the Head and members of Gapoktan, extension workers, farmers, and academics representations. Data were analyzed using descriptive statistics and a SWOT matrix. QSPM analysis was also performed to analyze the priority strategy. The results revealed that MFI's have several strengths and weaknesses both from internal and external sources, particularly the opportunities and threats. The strategy formulated becomes a priority, which is to improve the role and position of MFIs in alleviating poverty and as informal financing institutions. The MFI's position is strong because it is easily accessible, has simple procedures, does not require collateral, and is located in a rural area. The strategy that should be applied is increasing the role of members with psychological and demographic relationships and the spirit of mutual cooperation still owned by rural communities. The sustainability of MFIs can support the development of beef cattle farming and help grow rural economies.

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Section: B Analysis Of Efas (External Factors Analysis Summary) or Ef...mentioning

confidence: 99%

Strategy in Developing Microfinance Institution to Support Beef Cattle Farming Business in Rural Areas

Asnawi¹,

Amrawaty²,

Nirwana³

2023

Int. J. Adv. Sci. Eng. Inf. Technol.

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“…Geographic location, baseline inequality levels, and baseline population size affected the relationship between income inequality and population change. Suesse and Wolf [ 15 ] found that structural restructuring causes credit cooperatives to arise from dropping agricultural staple prices and declining bank lending. Land inequality and low asset sizes hindered regional cooperative growth, while ethnic heterogeneity had mixed consequences.…”

Section: Introductionmentioning

confidence: 99%

Does rural transformation affect rural income inequality? Insights from cross-district panel data analysis in Bangladesh

Al Abbasi,

Saha,

Begum

et al. 2024

Heliyon

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“…Modern microfinance dates back to the innovative lending in rural areas by the Grameen Bank of Bangladesh in the 1970s but the concept has emerged as a solution for the challenges of rural credit markets across space and time (Suesse & Wolf, 2020). Yet, much of the microfinance growth has been due to its expansion in urban markets as a response to rapid urbanization and increased attention to urban poverty (Armend ariz & Morduch, 2010).…”

Section: Introductionmentioning

confidence: 99%

Scope economies from rural and urban microfinance services

Hartarska

Zhang

Nadolnyak

2023

Southern Economic Journal

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Microfinance institutions (MFIs) operate in both rural and urban credit markets and provide financial services to the poor not served by commercial banks. MFIs must keep operating costs low to better serve their clients. We evaluate whether MFIs can lower their costs by exploiting economies of diversification from serving both rural and urban markets rather than specializing in only one. We apply a novel method to estimate scope economies that minimizes the well‐known “excessive extrapolation” and accommodates MFIs' heterogeneity. Analyzing panel data on MFIs from 105 countries over 2008–2018, we find that about half of loan‐only MFIs benefited from diversification and enjoyed scope economies of 16.6% while over two thirds of savings‐and‐loan MFIs experienced scope diseconomies of 11.7% suggesting advantages from specialization. Over time, the declining magnitudes and the prevalence of scope (dis)economies in both groups suggest that loan‐only MFIs have been able to serve costlier marginal clients while savings‐and‐loan MFIs have been learning and decreasing their scope diseconomies. Stakeholders encouraging the transformation of MFIs into regulated savings‐and‐loan institutions that serve both rural and urban markets should be aware of the presence of scope diseconomies for that business type and offer adequate support.

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Rural transformation, inequality, and the origins of microfinance

Abstract: , as well as participants at various conferences and seminars for insightful feedback and suggestions. Matthias Barelkowski, Sophie Bartosch, Julian Richter, André Wiesner and Iris Wohnsiedler provided invaluable research assistance. All errors remain our own.

Cited by 22 publications

References 61 publications

Strategy in Developing Microfinance Institution to Support Beef Cattle Farming Business in Rural Areas

Strategy in Developing Microfinance Institution to Support Beef Cattle Farming Business in Rural Areas

Does rural transformation affect rural income inequality? Insights from cross-district panel data analysis in Bangladesh

Scope economies from rural and urban microfinance services

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