Microfinance Participation Research Articles

Linkage between Microfinance Participation and Securing Employment through MGNREGP

In this paper, the relationship is assessed between participation in microfinance program under SGSY scheme through forming Self-Help Groups and getting employment through Mahatma Gandhi National Rural Employment Guarantee Program (MGNREGP). Using Tobit Model with endogenous covariate method, it was established that participation in microfinance program operating through joint liability credit contract helps the rural households, mainly the women, to generate more social capital than the non-participant households. Participation in the microfinance program ultimately helps them to get more information about different developmental programs like MGNREGP initiated by the Government. Hence, it was observed that microfinance participant member households got more number of man-days of employment through MGNREGP than the non-member households. It was also established that households with higher average monthly income and less dependency ratio were less prone to demand employment under MGNREGP.

Microfinance and women's health: an evaluation of women's health behaviors in Jimma, Ethiopia

Microfinance programs in Ethiopia have existed since the late-1970s, but the relationship between microfinance and women's health has not been extensively investigated. This paper reports on a study evaluating the characteristics of a sample of women participating in microfinance operations with health outcomes, as measured by a health check up in the past year and knowledge about family planning methods. A total of 100 women were selected for the study at a microfinance office in Jimma, Ethiopia, to answer a 48-question survey designed to investigate the characteristics of participation in microfinance in relation to: (1) healthy habits, as assessed by medical check-ups and knowledge of family planning methods, (2) education, (3) demographics, (4) decision-making abilities within their household, (5) access to borrowing money from another individual or institution and (6) domestic violence. The study showed that women participating in microfinance operations were likely to have had a medical check up in ...

Microfinance and Domestic Violence: A Regression Discontinuity Approach

We document the extent and type of domestic violence in rural Bangladesh, using a household level survey data collected during the 2006-2007. 48% of women reported having experienced physical violence by their husband in the last 12 months. Using a regression discontinuity approach we then estimate the effect of women’s participation in microfinance programs on domestic violence at the household and the village level. Our results show that women’s participation in microfinance diminishes domestic violence neither at the household nor at the village level.

Integrating the poorest into microfinance: The role of grant-based support and group-based lending

Realizing that the poorest do not benefit from conventional microfinance, BRAC has designed a comprehensive livelihood-support programme that involves asset transfers on a grant basis followed by microfinance with some flexibility, such as formation of lending groups (village organizations) with socially homogeneous members. BRAC offers microfinance after two years of grants. Using propensity score matching and three rounds of survey data, we analysed how the asset-transfer programme and socially homogeneous lending group helped the extreme poor participate more effectively in microfinance. The paper also investigates whether microfinance participation brought any changes in livelihoods. We found that the grant-based approach had positive impacts on microfinance participation of the ultra-poor households. We also found that formation of a socially homogeneous lending group helped the members more actively participate in microfinance. Impact assessment of microfinance participation showed that productive asset holding and per capita income were positively affected.

Assessing the Welfare Effects of Microfinance in Vietnam: Empirical Results from a Quasi-Experimental Survey

This article analyses the effects of NGO microfinance programmes on household welfare in Vietnam. Data on 470 households across 25 villages were collected using a quasi-experimental survey approach to overcome any self-selection bias. The sample was designed so that member households of microfinance programmes were compared with non-member households with similar characteristics. The analysis shows no significant effects of participation in NGO microfinance on household welfare, proxied by income and consumption per adult equivalent.

Research Opportunities in Social and Economic Networks

Social network patterns of interaction influence many behaviors including consumption, career choice, employment, investment, voting, hobbies, criminal activity, risk sharing, and even participation in micro-finance. Networks of relationships among firms and political organizations also impact research and development, investment decisions and market activity, international trade patterns, and political alliances. The study of how network structure influences (and is influenced by) economic activity is becoming increasingly important because it is clear that many classical models that abstract away from patterns of interaction leave certain phenomena unexplained. For example, the fact that information about jobs is largely disseminated through social networks has significant implications for patterns of wages, unemployment, and education. Beyond the many economic settings where social structure is critical, the study of social and economic networks can also benefit from an economic perspective. Tools from decision theory and game theory can offer new insight into how behavior is influenced by network structure; and can also be used to analyze network formation. In addition network analysis provides new opportunities and challenges for econometrics, laboratory and field experiments; and they are beginning to shed new light on the impact of social interactions ranging from favor exchange to corruption and economic development.

Kiva.org: Crowd-Sourced Microfinance and Cooperation in Group Lending

Altruistic peer-to-peer lending, or crowd-sourced Internet microfinance, exposes a unique environment in which to observe cooperative behavior. Geographically diverse individuals coordinate to provide capital to others in need, often for minimal, or in the case of Kiva.org, zero financial return. While significant microfinance research has chronicled the windfalls of group borrowing in organizations such as Grameen Bank, little has been written on the cooperative dynamics of group lending, observing crowd-sourced microfinance and what online organizational structures facilitate cooperation. At the end of 2008 Kiva.org announced the creation of “Lending Teams,” or cohesive open or closed membership groups established and categorized according to scope. These Lending Teams introduce forms of cooperative many-to-one and many-to-many group lending, based on tenuous concepts of identity. Groups vary according to category, size, scope, and activity, and this impacts participatory vitality of crowd-sourced lending. The “Kiva.org: Crowd-Sourced Microfinance and Lending Team Cooperative Behavior” study focuses on evaluating the extent to which Solidarity as a design-lever impacts social behavior. Looking specifically at Kiva.org as a prominent community for peer-to-peer lending, this study seeks to evaluate the advent of “Lending Teams,” their subsequent impact on group lending behavior, and the extent to which group openness, size, and categorization substantively alters online cooperative behavior. Based on Kiva.org data accessed through their public Application Programming Interface (API) in June 2009, this study qualitatively and quantitatively observes 120 Lending Teams. The study provides taxonomy of Lending Teams, and outlines key management choices that can foster greater in-group solidarity, and expand Lending Team participation on Kiva.org. More broadly, the study prescribes how online solidarity can improve participation in crowd-sourced microfinance.

Assessing the Impact of Participation in Women Self-help Group-based Microfinance

A quasi-experimental design was made under which the target group was compared with a selected control group across a set of household variables like income, assets positions, savings, consumption, employment, literacy and migration. A multistage random sampling was used to select 150 cross-sectional samples from Orissa, Jharkhand and Chhattisgarh states of India. Descriptive statistics, test of significance by z-statistics and probit model under econometrics were used to measure the impact of participation in the self-help group-based microfinance. The distribution of household income and assets was measured by Gini coefficient and Lorenz curve. The ‘household’ was taken as the unit of analysis. The study concluded with the positive impact on the increase in income, assets position, savings and literacy and in the reduction of migration of rural households. Weak evidence of significant impact of the group-based microfinance on the distribution of household income and assets was found. The participation of women in the self-help group was strongly determined by household income, employment, migration, saving and literacy positions.

“We Sacrifice and Eat Less”: The Structural Complexities of Microfinance Participation

Having borrowed money from a microfinance organization to start a small business many women in El Alto Bolivia are unable to generate sufficient income to repay their loans and so must draw upon household resources. Working from the womens experience and words this article explores the range of factors that condition and constrain their success as entrepreneurs. The central theme is that while providing the poor access to credit is currently very popular in development circles the social and structural context within which some women operate so strongly constrains their productive activity that they realize a net income loss at the household level instead of the promised benefits of entrepreneurship. This paper explores the social and structural realities in which women seek out and accept debt beyond their capacity to repay from the proceeds of their business enterprise. By examining some of the hidden costs of microfinance participation this paper argues for a shift from evaluation on outcomes at the institutional level to outcomes at the household level to identify the forces and factors that condition womens success as micro-entrepreneurs. While there has been much discussion on the benefits of microcredit lending and increasing critique of it on both ideological and substantive grounds there have been few ethnographically informed studies on consequences to users. (authors)

Exploring Theories of Patriarchy: A Perspective from Contemporary Bangladesh

n 1984 I visited Bangladesh to begin research on female garment workers. The image that remains deeply embedded in my consciousness is the dramatic change that characterized the streets of Dacca since I had left the country only eighteen months earlier. Perhaps most striking were the number of women who now walked along the road, often in groups of six or more, especially after a shift change at the recently opened garment factories that dotted the streets throughout the city. The image of women dressed in cotton saris leaving work in the early evening was in stark contrast to my earlier experience when I was one of only a few, if any, women walking quickly along these same roads. It also was a change from the time when I was the only woman in a government or commercial office, or in some of the smaller fresh produce or fish markets, unchaperoned by either an older or younger male companion. At first I could hardly make sense of this now strange and different place that had been my home for five years. Was I mistaken? Did I remember incorrectly? Did I get caught by the Western image of Bangladesh and Bangladeshi women dominated by purdah (female seclusion), only to confront the everyday lives of young women struggling to make a living? How was I to understand this apparently fantastic change in the course of a mere eighteen months? I have been challenged ever since to make sense of this dramatic reorganization of women's lives. Certain facts were self-evident: a growing number of garment factories were now part of the city, Dacca was an internationally recognized export-processing enclave, and thousands of women