Microfinance Activities Research Articles

Empowering female entrepreneurs through access to digital microfinance services

PurposeThe concept of women’s empowerment is widely regarded as a crucial factor in facilitating the integration and involvement of women in the development process. The cornerstone of women’s empowerment is widely acknowledged to be social and political engagement coupled with economic independence. This research aims to contribute to understanding the effects of access to digital financial services by microfinance institutions (MFIs) in Indonesia on women empowerment, specifically focusing on women at the bottom of the economic pyramid. This empowerment is assessed through social, political and economic dimensions.Design/methodology/approachThis study utilizes logistic regression (LR) to examine the effect of access to microfinance digital financial services on the social, political and economic determinants of women’s empowerment. The analysis is based on the threshold theory of decision-making. The present research includes a sample of 1,644 female entrepreneurs, namely ultra-micro small and medium-sized enterprises (SMEs), actively participating in microfinance activities in Daerah Istimewa Yogyakarta, Nusa Tenggara Barat and Sulawesi Selatan.FindingsThe findings indicate a statistically significant effect between access to credit and the two variables under investigation, namely social and economic empowerment. However, no significant effect was seen between credit access and women’s empowerment. Following this, a positive effect has been identified between credit access and several aspects of women’s empowerment.Research limitations/implicationsThe research establishes a framework and substantiates that women’s empowerment relies on economic autonomy, social engagement and political involvement. MFIs have been identified as significant contributors to this process. This will assist practitioners in formulating policy and implementing interventions to promote women’s empowerment, particularly in the context of digital microfinance. The results of this study will provide valuable insights for guiding future research endeavors in this field.Originality/valueThe work exhibits originality and serves as a valuable resource for those who recognize and appreciate its significance. This report is the first study to examine the correlation between female entrepreneurs’ access to digital MFIs and women’s empowerment dimensions.

Transforming rural women’s lives in India: the impact of microfinance and entrepreneurship on empowerment in Self-Help Groups

The study investigates how microfinance interventions and the entrepreneurial engagement of Self-Help Group (SHGs) members impact women’s social and economic empowerment in rural communities. The study employs a mixed-methods approach, combining quantitative data analysis and qualitative insights gathered through surveys, interviews, and case studies. The study’s findings demonstrated a notably positive and moderately significant impact of microfinance and entrepreneurial engagement on the social, economic, and psychological dimensions of women’s empowerment. Furthermore, the inclusion of case studies provided evidence that microfinance activities and entrepreneurship involvement have substantially empowered women across various domains, such as increasing financial independence, enhancing participation in decision-making processes, fostering social networks and support, and boosting their overall self-confidence and well-being. These insights emphasise the transformative potential of microfinance initiatives in advancing gender equality and women’s empowerment in diverse socio-economic contexts.

Social, economic and food insecurity among people living with HIV in Kenya during coinciding public health and environmental emergencies: a mixed-methods study

IntroductionDuring the COVID-19 response, Kenya experienced widespread regional floods, resulting in the displacement of communities and agricultural loss. This study aimed to characterise food insecurity and other social and economic...

Agriculture Practices in the Danuwar Community of Nuwakot District, Nepal

The Danuwar community is an indigenous group predominantly inhabiting the Terai, and Hilly regions of Nepal, practicing traditional agriculture. This study examines the current agricultural practices of the Danuwar community of Ganesthan, Nuwakot district, Nepal. Primary data were collected from direct field surveys with the help of structured and semistructured questionnaires. Similarly, the necessary secondary data were collected from published and unpublished literatures, and documents of Bidur municipality, Nuwakot. Still, Danuwars are practicing the traditional pattern of agriculture and needs training and skilled-oriented education for their improvement. Given their reliance primarily on agriculture, the transition towards modernization and commercial production of agriculture is pivotal for their socio-economic sustainability. Thus, it is suggested to empower them through technical education, market accessibility, irrigation, transportation, and microfinance activities that shall integrate the Danuwar community into mainstream development and attain self-sustainability.

MICROFINANCE REGULATION IN GHANA:

A well-functioning and regulated financial system is vital for businesses, consumers and the economy. Therefore, regulating microfinance activities is crucial to ensure institutional sustainability and customer protection. We explore the consequences of microfinance regulation in Ghana using the desk review approach to document lessons that could be learnt. Our preliminary findings suggest that there are some learning opportunities. These are regulatory methodology mismatch, mission drift tension, and the collapse of potentially rescuable institutions. Additional lessons include a need for better governance, implementation of complementary laws and inadequate regulatory capacity. The paper offers policy recommendations for future regulatory architecture and design.

Микрофинансовая деятельность в России: институциональные пустоты и непродуктивное предпринимательство

This article considers the relationship between the quality of the institutional environment and the development of microfinance activities, presents an overview of empirical data that allow us to record the impact of the microfinance institution in the Russian Federation on the socio-economic processes of society in the context of entrepreneurial structures functioning within the framework of this institution. The aim of the study was to identify the socio-economic effects of the microfinance institution, as well as to identify the reasons for the unproductivity of microfinanceorganizations (MFOs) as entrepreneurial structures, from the point of view of public welfare. The paper shows that the presence of institutional voids stimulated the development of unproductive type of entrepreneurship — commercial microfinance activities. The main institutional reasons for the inefficiency of private MFOs were identified, and the “shift of their mission” and its manifestations were recorded. It is shown that a significant problem in the microfinance market is the actual absence of current control by the regulator over the activities of MFOs as hybrid organizations with a “dual mission”, as well as institutional rules, in particular, incentives that determine by what means these organizations can strive to achieve their goals. This allows MFOs to maximize profits while ignoring their social function.

Генезис правовых основ коллекторской деятельности в контексте судебной реформы: этапы эволюции и современное состояние

The article traces the main stages of the formation and development of the legal foundations of collection activities in the Russian Federation. It is noted that at the first stage – until 2016 – the collectors, who began their activities in the Russian financial services market in the early 2000s, carried out their work within the frame-work of general civil legislation, based on their own ideas about legality. The adoption on July 3, 2016 of two Federal Laws No. 230-FZ «On the Protection of the Rights and Legitimate Interests of Individuals in the Implementation of Activities for the Repay-ment of Overdue Debts and on Amendments to the Federal Law «On Microfinance Activities and Microfinance Organizations» and No. 231-FZ «On Amendments to Certain Legislative Acts of the Russian Federation in in connection with the adoption of the Federal Law «On the Protection of the Rights and Legitimate Interests of Individuals in the Implementation of Activities for the Re-payment of Overdue Debts and on Amendments to the Federal Law «On microfinance activities and microfinance organizations», marked the beginning of the second stage of the development of legal regulation of this segment of Russian legislation. The current (third) stage in the evolution of the legal foundations of collection activities is associated with the entry into force of Federal Law No. 467-FZ dated August 4, 2023 «On Amendments to the Federal Law «On the Protection of the Rights and Legitimate Interests of In-dividuals in the Implementation of Activities for the Repayment of Overdue Debts and on Amendments to the Federal Law «On Microfinance Activities and microfinance organizations». It is stated that at this stage, the improvement of the legal regulation of this segment of Rus-sian legislation is carried out simultaneously in several directions with the priority of developing a digital model of interaction between the state, business and the debtor.

Microfinance in the Russian Federation: Changes in Industry Indicators in the Context of Global Challenges

The purpose of the study was to predict the state of microfinance organizations in the Russian Federation, verify the trends that determine their development in the context of global geopolitical challenges. The research was carried out using logical and empirical methods. The article analyzes changes in the main indicators of the functioning of microfinance organizations (MFOs) in the Russian Federation over a ten-year period (2014–2023). Based on an analysis of changes in key indicators characterizing domestic microfinance organizations (the number of microfinance organizations, the volume of microloans issued and their structure in the context of online and offline formats, the main segments of microfinance), the author comes to the conclusion that microfinance activities in the Russian Federation are highly resistant to negative impacts environmental factors. The scientific novelty of the article lies in the verification of the main trends in the development of domestic microfinance, which include tightening regulation of microfinance organizations by the Central Bank of Russia, further consolidation, industry concentration, development of non-core activities, BNPL services, dominance of online microcredit, deterioration in the quality of debt servicing, reducing the investment attractiveness of the industry. In conclusion, the author identified the forecast values of the main performance indicators of MFOs for the period 2024–2027, and possible restrictions on the future development of this.

Islamic crypto assets and regulatory framework: evidence from Indonesia and global approaches

PurposeThe purpose of this study is to formulate a governance and regulatory framework for Islamic crypto assets (ICAs). A balanced regulatory framework is required to protect consumers and to encourage digital Islamic finance innovation.Design/methodology/approachThis study focuses on Indonesia and compares it to other countries, specifically Malaysia and the UK, using statutory, comparative and conceptual research approaches.FindingsThe ICAs are permissible (halal) commodities/assets to be traded if they fulfil the standards as goods or commodities that can be traded with a sale and purchase contract (sil’ah) and have an underlying asset (backed by tangible assets such as gold). Islamic social finance activities such as zakat and Islamic microfinance activities such as halal industry are backed by ICAs. The regulatory framework needed to support ICAs includes the Islamic Financial Services Act, shariah supervisory boards, shariah governance standards and ICA exchanges.Research limitations/implicationsThis study only examined crypto assets (tokens as securities) and not cryptocurrencies. It used regulations in several countries with potential in Islamic finance development, such as Indonesia, Malaysia and the UK.Practical implicationsThe ICA regulatory framework is helpful as an element of a comprehensive strategy to develop a lasting Islamic social finance ecosystem.Social implicationsThe development of crypto assets must be supported by a regulatory framework to protect consumers and encourage innovation in Islamic digital finance.Originality/valueICA has growth prospects; however, weak regulatory support and minimal oversight indicate weak legal protection for consumers and investors. Regulating ICA, optimising supervision, implementing shariah governance standards and having ICA exchanges can strengthen the Islamic economic ecosystem.

Determinants of the Microfinance Development in Vietnam

The factors affecting microfinance development with survey data from 400 managers of 30 credit institutions from July to December 2022 in Vietnam were identified. The major findings are the development of activities of financial institutions still faces many difficulties and inadequacies, such as the difference in the process of developing the operation of small-scale and large-scale organizations, medium and large. Besides, external factors include competition with the bank for social policies and commercial banks. Moreover, the main factor is the diversification and quality of services that substantially impacted microfinance development in five aspects. Based on the research results, were provided policies such as promoting propaganda to develop and expand microfinance activities towards various subjects to improve the providers' quality of service.

How Bridging Social Capital Development Connecting Members of Village Savings and Loan Associations in Community Through Microfinance Activities

The study indicated how Vietnam Bank for Social Policies’s microfinance activities with Village Savings & Loan Associations model have contributed to the development of social capital in the community. After surveying 356 associations’ members (questionnaire and in-depth interviews), the result showed there has been an increase in social capital; and with it, relationships between members have improved, as evidenced by the formation of self-help groups, increased participation in social organizations, and members' ability to establish relationships and business connections using the human resources acquired via the Vietnam Bank for Social Policies in community. One of the unique and significant findings is the diversity in how the members developed said capacity and how much they have accomplished. This result brings great meaning by demonstrating the effective social impact of the social welfare policies to its beneficiaries. The study also proposed solutions to promote the Vietnam Bank for Social Policies activities and social capital toward a sustainable community development.

Identifying the association of women’s empowerment with reproductive and maternal health practices using a cross-sectional study in the context of self-help groups in rural India

Background: Globally, women’s empowerment is captured through different combinations of indicators related to their collective and individual empowerment. In this paper, the association of diverse domains related to women’s collective and individual empowerment on their reproductive and maternal health practices were assessed. Collective empowerment referred to a cluster of indicators measuring mutual support, rights, and access to services women received, as a result of membership in self-help groups (SHGs) focused on micro-finance activities. Women’s individual empowerment was measured through their perception to make decisions on their own, be mobile, financially self-reliant, self-confident in expressing themselves, having self-esteem and being free from spousal violence. Methods: Cross-sectional data were collected in 2017 from 2,197 SHG members across 57 administrative blocks of Uttar Pradesh, India. Using exploratory and confirmatory factor analysis, the sub-domains of individual and collective empowerment were developed. The reproductive and maternal health indicators included antenatal care, delivery preparedness, postnatal care and current contraceptive use. Bivariate and multivariate analyses, using logistic regression, were carried out to measure the association of sub-domains of women’s empowerment with health practices. Results: Collective and individual empowerment were independently and jointly associated with correct health practices. Women with greater empowerment through independent mobility, high self-esteem, access to financial resources, and confidence in interacting with a frontline worker, were more likely to access antenatal care. Similarly, delivery preparedness—which entailed deciding on the place of delivery, arranging for transportation during labor, and managing expenses for the delivery—was positively influenced by collective support from fellow SHG members. Receiving postnatal care was positively associated with self-confidence and financial autonomy, and current family planning method use was positively associated with self-confidence, lower spousal violence and confidence in support from the group. Conclusions: Women’s collective and individual empowerment were independently and jointly positively associated with health outcomes among SHG members.

Кредит должен быть обоснованным

On January 1 this year, Federal Law No. 398-FZ dated December 6, 2021 “On Amendments to the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)” and Articles 9 and 14 of the Federal Law “On Microfi nance Activities and Microfi nance Organizations” came into force aimed at preventing the accumulation of risks by borrowers and slowing down the excessive growth of unsecured consumer lending.

DEMOGRAPHIC INFLUENCE AND ROLE OF MICROFINANCE TOWARDS FAMILIAL EMPOWERMENT OF WOMEN – AN EMPIRICAL STUDY

Empowerment of women is a contemporary issue to bring development in the society. Empowering women is multidimensional in nature. Familial empowerment of women is one of the critical dimensions besides other essential dimensions of women empowerment like economic, personal empowerment, etc. This empirical study was conducted to quantify the level of familial empowerment of women and to identify whether engagement in microfinance activities plays a role towards her empowerment. This study found that engagement in microfinance activities has a positive impact on the achievement of familial empowerment among women. Highly educated husbands are found encouraging their wives to be involved in microfinance activities in the study area. It is also revealed in the study that when women are undertaking entrepreneurial activities, they are getting keen interest in joining microfinance activities. Therefore, the necessary policy measures need to be implemented for promoting self-employment, entrepreneurial activities in the rural economy.

Organization of work to counteract illegal withdrawal of funds and money laundering through microfinance organizations

The relevance of the chosen topic is due to the problems of ensuring the protection of personal rights when interacting with microfinance organizations, protection of personal data of citizens, fraudulent actions when entering into a loan agreement using copies of documents, personal data in the information telecommunications network Internet, as well as stolen or lost documents, protection of citizens rights when processing personal data by microfinance organizations to obtain a consumer loan. Ensuring the protection of society and the state by creating a legal mechanism to counteract the legalization (laundering) of income and funds withdrawal abroad. In the microfinance market, there are organizations that operate illegally; they do not belong to any state register, as a rule. You will never find any responsible persons at the legal address of such companies. Therefore, in case of damage, compensation for losses through civil mechanisms or appealing directly to the culprit or to the court is almost impossible. The average citizen is not able to ensure their own economic security and financial stability. Due to legal illiteracy and the specific features of this type of activity, the citizen is the vulnerable party of relationship. A growing social tension in connection with filing by creditors in the face of microfinance institutions is due to obviously overestimated obligations in the loan agreement in case they were not performed during a long period of default. Such practice was quite common prior to the amendments to the legislative acts regarding limitations on the accrual of interest on consumer credits (loans) for up to one year. The activities of microfinance organizations are directly related to financial transactions involving the transfer and provision of funds, which may be of interest to criminal circles or other persons engaged in money laundering and terrorist financing. The relevance of the research is also dictated by the lack of sufficient scientific recommendations to create the necessary legal mechanisms and train government agencies, including the Ministry of Internal Affairs, the Prosecutors office and the courts, in order to prevent infringement of citizens rights when they deal with microfinance organizations in obtaining consumer loans. The lack of effective management of such relations is dangerous in terms of requirements set up in article 46 of the Constitution of the Russian Federation on the right to guaranteed judicial protection of the rights and freedoms of citizens. The novelty is related to the attempts to analyze the activities of microfinance organizations not from the position of presenting this type of activity as an economic tool for providing financial assistance to vulnerable segments of the population, but as a potential threat to society, since uncontrolled monetary relations will lead to criminalization of the activity and further worsening of the financial situation of citizens. Practices of foreign countries show that these tools are implemented only in countries with a low level of economic development. In Western Europe, microfinance is practically not used; instead, other tools are applied, such as raising household incomes through the creation of highly qualified jobs, which is a contradictory practice. The purpose of the research is to study public relations in the field of microfinance organizations, identify gaps and contradictions in this area, develop and justify possible legal proposals to eliminate them. Based on the analysis of international agreements in the field of countering the legalization (laundering) of income and withdrawal of funds, mechanisms of interdepartmental interaction in the Russian Federation, it is advisable to develop measures aimed at improving Russian legislation on microfinance activities.

Impacts of Microfinance Activities on Social Capital Development Regarding the Relationships between Members of Village Savings and Loans Associations

The study indicated impact of microfinance activities with Village Savings and Loans Associations (VSLAs) to community’s social capital development. Based on the responds of 356 members have been participating in the VSLAs (questionnaire and in-depth interviews), there has been a progression in social capital regarding members’ relationships proving the changes in members and their social relationship as well as the trust among them after joining the VSLAs. One of the unique and significant findings was the different ways and levels of trust among the members. The important of this finding is it emphasized how the social impact can effectively benefit the subjects of social welfare policies. The study also proposed solutions to promote the activities of VSLAs and develop social toward sustainable community development

A Detailed Study on the Importance of Microfinance on the Banks in Uzbekistan

This research work investigated the Importance of Microfinance on the Banks in Uzbekistan. The study examined how micro-finance activities and features such as group membership, pre-loan training, cross guarantee ship, loan size, technical and managerial training, among others, impact on the survival, growth, productivity and performance of Micro finance in Uzbekistan. The hypotheses formulated were developed around the theories of financial growth model, pecking order theory, and contract theory. Four hypotheses were raised and tested at 0.05 significant levels. The findings revealed that micro finance and micro-financing enhance survival of Micro finance but not sufficient for growth and expansion of such Micro finance. The result also revealed that microfinance has positive effects on productivity and performance of local entrepreneurs. The findings from the interview sessions revealed that micro financing is not effective and substantially being practiced in Uzbekistan as many grant more individual loans than group based loans, thereby increasing their running cost and putting their portfolio at risk. We also recommend that enterprises supported by MFBs should be linked up with larger financing window like the fund or Strategic Partners for expansion and growth funding after survival. DOI: 10.7176/RJFA/12-20-02 Publication date: October 31 st 2021

GIẢI PHÁP NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG CỦA CÁC TỔ TIẾT KIỆM VÀ VAY VỐN HƯỚNG ĐẾN PHÁT TRIỂN CỘNG ĐỒNG BỀN VỮNG

In today's community development, capacity building and community capital developing through social-welfare programs and policies is prioritized for integrated implementation for building the self-help community. Especially the important role of voluntary groups in the community towards sustainable development. With the sample of 356 VSLA members, the survey results have brought out the solutions for improving the microfinance activities via VSLA model such as promoting the role of financial and financial management service providers; improving the role of commune-level in-charged officers and group leaders; enhancing the quality of VSLA’s activities; and developing VSLA members’ skills and capacities. These are important solutions to build community capacity and mobilize people's voluntary participation in activities that would help develop the community sustainably.

Measuring the Equilibrium Impacts of Credit: Evidence from the Indian Microfinance Crisis

AbstractIn October 2010, the state government of Andhra Pradesh, India, issued an emergency ordinance, bringing microfinance activities in the state to a complete halt and causing a nationwide shock to the liquidity of lenders, especially those with loans in the affected state. We use this massive dislocation in the microfinance market to identify the causal impacts of a reduction in credit supply on consumption, earnings, and employment in general equilibrium in rural labor markets. Using a proprietary district-level data set from 25 separate, for-profit microlenders matched with household data from the National Sample Survey, we find that district-level reductions in credit supply are associated with significant decreases in casual daily wages, household wage earnings, and consumption. We find a substantial consumption multiplier from credit that is likely driven by two channels—aggregate demand and business investment. We calibrate a simple two-period, two-sector model of the rural economy that incorporates both channels and show that the magnitude of our wage results is consistent with the model’s predictions.

Are NGOs and cooperatives similar or different? A global survey using microfinance data

Corporate governance remains fundamental to ensuring the social mission alongside the financial sustainability of microfinance institutions. One primary governance issue relates to the legal form used to perform microfinance activities. The sector deploys various forms including Banks, Non-Bank Financial Institutions, Cooperatives and NGOs, but each of them has unique features that lead to different orders of priorities and to distinct structures and mechanisms to pursue such a dual objective. This study compares the board governance model and the performance of cooperative organizations (COOPs) with nongovernmental organizations (NGOs) involved in microfinance. Using data on 352 rated microfinance institutions, the test results show that, compared to NGOs, COOPs have larger boards and a higher number of board meetings. However, NGOs have a greater percentage of international board members. The test on performance reveals that, whereas COOPs are more cost-efficient and charge lower interest rates, NGOs generally perform better in terms of social performance. However, the two organizational types do not perform differently in terms of profitability.