Rural Credit & Microfinance Research Papers (original) (raw)

Self Help Groups have been a part of rural employment in India since 1985 (Nair,2015). While the purpose of these groups is to employ and empower rural populations, especially individuals that either have no economic means; or those who are employed in non- economic activities, their success rate so far has been debatable(Deininger and Liu, 2019).
In 2021, on the occasion of the Fiftieth Anniversary of Statehood, the Government of Himachal Pradesh attempted to reboot the Self Help Groups in various rural pockets throughout the state, with a special focus on reviving handicrafts, while providing money and economic incentives to rural women. The present case study attempts to analyse this new trend for self-help groups in business with respect to women of Mahi Panchayat of the Kandaghat Block of District Solan, where women of 13 Self Help Groups of Mahi Gram Panchayat have been employed in basketry using pine needles.
For the purpose of this study several individual members of the said SHGs were personally interviewed and supervising authorities were consulted. Also, the data records with these groups and in charge of Himachal State Emporium were accessed. Through this study, therefore, an attempt has been made to understand how successful this endeavor has been in the economic emancipation of the women involved and how sustainable this venture is in terms of raw materials used and objects made.

- by
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- Economic Sociology, Women's Studies, Rural women's empowerment, Self Help Groups

Microfinance has broadened rapidly since its inception in the late 1970s. However, scholars have divergent views on whether and how much it helps to lift the poor from the economic quagmire. This research investigates the assessment of the impact of participation in micro-finance. It is difficult to disentangle the impact on poverty reduction of microfinance as an anti-poverty intervention scheme and establish a causal relationship between participation and poverty indicators, because of unobserved heterogeneity and reverse causality problems. Using the 2009 data set, first, we estimated propensity scores for participation on several pre-treatment variables. We then matched clients and non-clients on the basis of these variables. Next, we estimated the average treatment effect, considering participation as a treatment, and participants as the treated group. Finally, we employed different matching methods to establish the robustness of the utilized methods. In addition, for the year (2007 and 2009) panel data sets, we used the fixed effect (FE) and random effect (RE) panel data analysis techniques to fully address the two major problems stated above. Although we found significant impact of microfinance on household productive assets, its impact on fixed assets and monthly expenditure is insignificant. The propensity score matching and the panel data analyses identified microfinance as having direct temporary effects on household productive assets but limited (no) effect on households' fixed assets and monthly expenditures.

This paper contrasts individual liability lending with and without groups to joint liability lending. By doing so, we shed light on an apparent shift away from joint liability lending towards individual liability lending. We show that individual lending with or without groups may constitute a welfare improvement so long as borrowers have sufficient social capital to sustain mutual insurance. Secondly, we explore how a purely mechanical argument in favour of the use of groups -namely lower transaction costs -may actually be used explicitly by lenders to encourage the creation of social capital.

- by Maitreesh Ghatak
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- Finance, Development Economics, Microfinance, Banking

Micro industries investment scheme (MIIS) of Islami Bank Bangladesh Limited (IBBL) is very attractive and popular to small businessman or new entrepreneur. The feature of the Micro Industries Investment scheme of the Bank is to invest on the basis of profit-loss sharing system in accordance with the tenets and principles of Islamic Shariah & Earn profit. And this micro industries investment of IBBL helps small business firms to grow in many ways. Clients are satisfied with IBBL’s MIIS’s reasonable profit rate of return. IBBL monitors their existing Micro Industries Investment effectively and efficiently. IBBL also does financial support in case of bad socio-economic and political condition. Their investment repayment period is reasonable to repay for the micro industries clients.

The current thinking among of the actors in the Brazilian agribusiness sector makes explicit the idea that the changes operated in their areas of intervention, from the late 1980s, were promoted basically by the private initiative. However, some studies indicate that one can not speak about agribusiness without thinking in the government and in his public policy, which not only explains its origin but also its expansion. Currently, a set of instruments influences the dynamics of agribusiness, such as economic policy, regional planning, labor policy, environmental, credit and infrastructure policy, etc. This article focuses on the debate of agricultural policy (National Agricultural Credit System - SNCR), particularly in the case of soybeans in MatoGrosso. Besides the use of statistical data, the paper uses information from field surveys conducted between 2007 and 2013.

- by Valdemar J. Wesz Junior and +1
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- Political Sociology, Rural Sociology, Agribusiness, Politics

The implementation of the Financial Sector Adjustment Programme has beckoned to a number of foreign banks to flock into the country to do business. This has brought about intense competition in the banking industry with its attendant implications for profitability in the industry. In the light of this, the study seeks to make a comparative analysis of the profitability of foreign and local banks in Ghana. The study uses a sample of six banks of which three are foreign banks. Financial statements of the selected banks from 2008 to 2014 are used for the analysis employing profitability ratios such as Return on Assets (ROA), Capital Adequacy (CA), Return on Equity (ROE) and Management Efficiency (ME). We find wide fluctuations in the profitability ratios of the banks. Again, the foreign banks are found to have outperformed the local banks in ROA, CA and ROE. The local banks however, performed better than the foreign banks in ME, except in 2009. We conclude that, the foreign banks are more profitable than their local counterparts during the period under study. It is therefore recommended that, protective measures be put in place to make the local banks more competitive. For instance, the local banks could be required to make less minimum capital requirements than the foreign banks.

The audit of MFIs is apparently close to that of traditional financial institutions. In the context of microfinance, it turned out that the follow-up systems of credit portfolio constitute the greatest risk of their activities. It is therefore appropriate for external auditors through a
set of tools and techniques to assess the level of vulnerability of these institutions to credit risk. In the specific case of the audit conducted within the « CREDIT DU GOLFE »
institution on the basis of qualitative and quantitative studies involving the chi-square association test, we found deficiencies in internal control and procedures granting and follow-up of credit implemented within this institution. In order to secure these procedures and reduce the rate of unpaid within this institution, it is advisable for the persons in charge of this institution to ensure the independence of internal control department and also ensure compliance with procedure established by the various departments in charge of loans.

In this monography the theoretical and practical questions of a world
and Ukrainian cooperative movement are considered, the sight, new, not
traditional for Ukraine, on cooperative societies as the non-profitable form
of managing, form of the self-help, economic and social self-protection of
the population is displayed. On the basis of the analysis of world expcriPnce
the attempt is carried out to solve the important scientific problem -- to
develop the basic rules of the modern theory of cooperation and to crPat P
theoretical base for revival in Ukraine of the most various forms of lhe
cooperative self-help of the urban and rural population.
The fundamental theoretical questions of development of credil
cooperation as the forms of the financial self-help of the population are
investigated, the foreign models of credit cooperative societies, system of
cooperative crediting of the different countries, expansion of credit
cooperation in the countries of the world, theoretical and practical
questions of development of credit cooperation in the world and in Ukraine
are analysed. There are developed and is scientifically proven main
conceptual directions for solving of an important for Ukraine scientific and
applied problem - organization of system of the self-help of the population
in conditions of an economic crisis.
This monography will help political and public figures of Ukraine to
see essentially new direction in solving of social problems of the population,
and will show population a possible solution of a difficult economic
situation.
For scientists, deputies of different levels, farmers, small businessmen
and wide circle of the readers, which are interested in idea of the economic
self-help of the urban and rural population.

This thesis paper aims to study microfinance operations in Bangladesh. Besides, the study examines Islamic microfinance activities in general. Qualitative methods and secondary data have been used in this study. Since independence, Bangladesh has seen many ups and downs in its economy. In this context, it is notable that the country's per capita income has exceeded around two thousand US dollars in recent years. All the indicators of GDP growth are going upward. The overall economic growth is more than 7% consistently. This study has found that, with the development of microfinance services in Bangladesh since the 1980s, the poverty rate has been decreased, and significant results have been observed. The poverty rate declined gradually since 1991, which was 57% in 1991, decreased to 21% until 2018. Microfinance has an essential place in the economic growth of Bangladesh. By the end of 2018, microfinance institutions have $ 7.17 billion in outstanding annual loans and collected 10.46 billion in the form of paid loans within approximately 31.20 million members. Over the past two decades, Islamic microfinance (IMFs) has been a socio-economic development approach along with traditional microfinance in many countries. This thesis paper concludes that Islamic microfinance plays a vital role in poverty reduction with aid financing tools such as zakat and charity. Islamic microfinance institutions also offer micro-credit by means of various mechanisms based on the principles of sharia such as Karz-i-Hasan, Murabaha, Mudaraba, Takaful, Ijarah, and Salam. Moreover, Islamic microfinance is supporting the strengthening of the economy by financing entrepreneurs and sharing possible risks. Therefore, there is a significant potentiality for Islamic microfinance in achieving the 2030 SDGs.

- by Syed Magfur Ahmad
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- Economics, Islamic Economics, Microeconomics, Microfinance

The free senior high school policy is one of best social and economic intervention policies that openly affect both parents and their wards in senior high school. This realisation is reached on the backdrop of the policy’s role in redeeming parents from their economic and financial burden. This study therefore looks at the effect of introducing the free senior high school policy on the economic and social lives of parents and students respectively. A correlational cross-sectional descriptive design was used. Questionnaires were administered on three hundred and thirty-six (336) parents of wards in three senior high schools in the North East and Upper East Regions of Ghana. The study confirms that the introduction of the free senior high school policy relieved the financial burden of parents, especially guardians from rural settlements. Besides, there was lack of adequate stakeholder consultation, hence saddled with implementation challenges. Delay in disbursement of funds for feeding and learning materials presented yet another problem. It is important that governments find sustainable sources of funding the educational system and also ensure the double-track system is regularised into a single-track system by expanding academic user facilities and increasing the numerical strength of both teaching and non-teaching staff in various senior high schools.

In Ghana, micro finance institutions have been on the rise with micro credits, micro savings among other facilities having been portrayed as a way to reach poor people in the development process, and as a new innovative strategy for alleviating poverty. The failure of many women to exploit fully the products and services offered to them by the Micro finance institutions may influence the growth of women owned enterprises. Thus, this study aimed to analyze the role of microfinance institutions on growth of women owned enterprises in La Dade-Kotopon Municipality, Accra. The study was guided by the following objectives: to assess the extent to which access to credit facilities influence the growth of women owned enterprises; to examine the influence of micro savings on growth of women owned enterprises; and to find out the influence of training and advisory services on growth of women owned enterprises.
The study used a sample size of 150 women entrepreneurs who have benefited from microfinance services from Adipa Microfinance and La Community Bank offices in La, Accra by questionnaire. The data gathered from the field were analysed and presented by means of inferential statistics and descriptive statistics such as mean, standard deviation, frequency tables, and percentages using SPSS version 24 software. The findings from the study showed that there was a positive effect of access to credit facilities from microfinance institutions to growth of women business enterprises. The access to loan facilities has the highest association with the growth of women business enterprises compare to other variables. There was a positive association between trainings and investment advisory service and microfinance institutions influence growth of women enterprises. The recommendations of the study are that the financial institutions should increase the amount of loans to the women enterprises as the data in this study had shown that the loans allocated were not sufficient.

- by Selasi Ayittey
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- Microfinance, Rural Development, Poverty Alleviation, Rural Credit & Microfinance

It has been 66 years of Independence but the rampant poverty and adamant unemployment could not be fought-out. Removing Poverty and generating easy-self-originating employment is the only panacea for ailing economic system of India. Social injustice, Disparity between the wages and the wealth, Regional economic imbalance, Political and social divide are the results of rampant poverty and weak employment generation mechanism. These two culprits have not only created an acute disorder in the economic set up of the country but also pushed Indian economy down on the world – graph. Microfinance is not clearly defined in India. For instance, if an SHG (Self Help Group) gives a loan for an economic activity, it is seen as microfinance. But if a commercial bank gives a similar loan, it is unlikely would not be treated as microfinance. In the Indian context there are some value attributes of microfinance as discussed in various reports and studies. Microfinance is an activity undertaken by the alternate sector (NGOs). Therefore, a loan given by a market intermediary to a small borrower is not seen as microfinance. However, when an NGO (Non-Government Organisation) gives a similar loan it is treated as microfinance. It is assumed that microfinance is given with a laudable intention and has institutional and non-exploitative connotations. Therefore, we define microfinance not by form but by the intent of the lender.
The present study was based upon four well-framed objectives. These objectives are achieved through two way actions – a) By utilizing various studies, survey reports and researches and b) By administering a questionnaire on 761 poor skilled workers working in different dimensions of units in Ghaziabad Region. The insurance sector should play a role with banks to empower the microfinance so that poverty can be reduced and employment can be strengthened. Thus, it can be concluded that Microfinance can play a key role in Poverty Reduction and Employment Generation.
Keywords: Microfinance, Self-Employment, Poverty and Unemployment, Insurance Companies, Social Injustice, Disparity, Regional Imbalance.
JEL: G18, E13, J31, I32, E24, E25.

- by Prof. Himanshu Agarwal
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- Rural Credit & Microfinance
- by Dian Masyita
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- Microfinance, Islamic Finance, Financial Inclusion, Islamic Banking And Finance

This paper presents an overview of the agrarian credit scenario in India. Drawing from past studies and previous research, this paper provides a detailed analysis of the various issues pertinent to the functioning of agrarian credit markets. These include the glaring chasm between demand and supply of agrarian credit, the emergence of sectors within the Indian economy which compete with agriculture for institutional credit and the aversion of institutional lenders towards agrarian borrowers. The paper also attempts an analysis of deficiencies plaguing the three distinct phases of a credit cycle-resource mobilisation, lending and recovery.

- by Sourovi De
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- Agricultural Economics, Agriculture, Indian economy, Rural Credit & Microfinance

MSMEs are particularly important for emerging countries, primarily because of their potential in job creation. The MSEs are more than just GDP earners; they are instruments of inclusive growth which touch upon the lives of the most vulnerable, marginalised, women and the most skilled. Being the largest source of employment after agriculture, the MSE sector in India enables 650 lakh people. MSEs also act as ancillary industries for large scale industries. Yet, lack of access to finance is a major obstacle to their growth. In addition to limited development of industries in NER, there is limited availability of data on whatever industries exist there. Around 54% of industrial units are concentrated in Assam among NE states. There were 37,356 registered MSME units in Assam providing employment to 2.05 lakh persons till the end of March 2013. The SLBC data showing the credit disbursals towards MSME sector by commercial banks inAssam do not show a favourable picture. Formal lending sector is always preferred over informal sector by the MSMEs. The study aims to find out the characteristics of MSMEs operating under rural villages in Assam and also the various problems encountered by them in obtaining finance from banks.

- by Maumita Choudhury
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- Banking, Banks and credit markets, Rural Credit & Microfinance, MSMEs

By inspection, observation and government records there are too many poor in Southwest Nigeria who require micro/small financial services such as credit, insurance, money transfer etcetera in order to engage actively in productive activities and improve their standard of living. Paradoxically, governments across the world, particularly in Nigeria over the years, have not been able to adequately help the poor in spite of all the rhetorics and several failed poverty-alleviation projects. The objective study examines the roles of microfinance towards the dispersion of credit among the working poor and also helped to improve the standard of living in Nigeria. The study draws from the data collected from the field survey and these were reported using tables, frequency counts and cross-tabulations to draw inferences. In addition, a loan demand model was specified and estimated using the Ordinary Least Squares (OLS) econometric technique.The study used cross-sectional data collected from selected respondents in selected areas of both the Lagos and Ogun States of Nigeria respectively. The study confirmed that most of the Microfinance banks in Nigeria are tailored after the Grameen Bank which focuses on the poor and people with basic, little or no education and that loan demand is interest rate insensitive to loan demand. The study recommended that MFIs should design appropriate products that are flexible enough to meet the different needs of the poor for both production and consumption purposes. Government should urgently tackle the infrastructural gaps such as electricity, water and efficient transportation system which impact greatly on the standard of living of the people. JEL Classification: G21, G33

The study was conducted to analyse the utilization of micro-credit among small scale rice producers in Danbatta Local Government Area of Kano State. Structure questionnaires were used to collect the data using 60 respondents. The data were analyse using simple descriptive statistics, gross margin, and multiple regression model. The results showed that 38.3% of the farmers were within the age group of 41 – 50 years, all (100%) were males and 90% were married. One third (33.3%) of the respondents had household size of 5 – 10 people, 33.3% had tertiary level of education and 81.7% were members of various cooperative societies. The result also revealed also reveal that majority (63.3%) had farm size of 1-2 hectares, 45% acquired their farmland through inheritance, 50% cultivated fadama as their method of rice production with Dam as their major source of irrigation water which constituted 58.%. furthermore, the result showed that 71.7% were grated N1000,000 – N 150,000, 57.1% got the loan through their cooperative societies, while 41.7% utilized the loan for payment of farm operations. The study showed that variable cost constituted 87.94% of the total cost, net farm income was found materials input and output and level were found to be significant at 1% and 5% respectively, while the value of R2 was found to be 83.4% High cost of labour and other inputs, and inadequate finance were the major problems associated with rice production in the study area. In conclusion, farms used the loan to pay for farm operations. It was recommended that provision of modern technologies can reduce these costs drastically.

- by Nazir Muhammad Abdullahi
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- Rural Credit & Microfinance

Indebtedness is a multi-faceted problem. It is very interesting to understand this problem among different occupations of rural households. In this paper, an attempt has been made to study the incidence and extent of indebtedness among rural households of different occupations. For this, we have used the sixth decennial All-India Rural Debt and Investment Survey (AIDIS) carried out by the National Sample Survey Organization (NSSO) during the 59th NSS round. It is found that there is low risk and high extent of indebtedness among the households having self-employed in agricultural and non-agricultural occupations in the country. These two occupational groups are on top of the asset and income distribution ladders in rural India. Scheduled caste household self-employed as cultivators, artisans, trading, etc. seems to have drawn substantial benefit from affirmative actions that resulted in their lesser risk of sinking into indebtedness. On the contrary, there may be some location disadvantage of being settled in remote areas and ownership of low quality land may be responsible for pushing scheduled tribe cultivators more into the risk of indebtedness. The occupational group wise analysis also rejects the oft-cited reason of consumptive nature as one of the main reasons for indebtedness in the rural household but holds true regarding the extent of indebtedness. Similarly, the occupation wise analysis confirms the thesis of debt and prosperity going together but it seems to be more relevant for the cultivator group of household

- by Kulwinder Kaur
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- Rural Credit & Microfinance

This paper investigates factors affecting the choices that loan officers make in the allocation of loans applicants in Ethiopia. We conducted a field experiment on 800 randomly selected loan officers from 8 Microfinance Institutions (MFIs) operating in four regions of Ethiopia (Addis Ababa, Amhara, SNNP, and Oromia). The selected MFIs take more than 80% of the microfinance market share and hence we believe that our sample fairly represents the microfinance industry of the country.

- by Tekie Alemu
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- Rural Credit & Microfinance

This paper investigates the impact of External Factors (EF) on the Loan Delinquency (LD) of Microfinance Institutions (MFIs). Drawing upon a field level survey developed in line with linker five scale and conducted in 2014-2015 to 416 respondents in 78 MFIs located in seven different regions of Cameroon, the paper examines if external variable such as Legislative Issues (LI), Economic Contagion (EC) and Economic Down Turn (EDT) are root causes of loan Delinquency in MFIs. While acknowledging other contributing factors to LD such as late disbursements, poor timing, high interest rate, poor training to staff/ beneficiaries, management inefficiency etc. Multiple regression analysis was used to establish relationship between LD and the identified external factors. The regression results obtained indicates LI is the core external cause of MFIs LD. CE and EDT were identified to be statistically insignificant. Therefore, we can conclude that in addition to profit motive (internal cause), LI as an external factor contribute significantly to the alarming rate of LD in MFIs. To overcome this challenge requires a collective effort both from the regulatory authorities, the government the banking commission and above all the general assembly of these institutions. The paper finally contends that major stakeholders in the microfinance scene of Cameroon have failed in their roles to strengthened MFIs sufficiently to cope with rising challenges in the market. The paper considers delinquency management as a gauge not only for MFIs sustainability but as a means to boost deteriorating customers' confidence.

La ricostruzione storica della fondazione e dello sviluppo della Cassa Rurale di Lucinico completa la serie di ricerche sulle origini della cooperazione di credito nei tre paesi che, nel 1973, diedero vita alla Cassa Rurale ed Artigiana di Lucinico Farra e Capriva. Quella di Lucinico fu l'ultima ad essere costituita, sempre per iniziativa di mons. Luigi Faidutti, ormai affermata guida del movimento cristiano-sociale dell'allora Contea Principesca di Gorizia e Gradisca. La pubblicazione vuole, prima di tutto, rendere omaggio a quanti impegnarono le loro intelligenze, il loro tempo ed i loro patrimoni in un'impresa economica tutt'altro che facile e non priva di rischi.

- by Paolo Iancis
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- Economic History, Cooperatives, Rural Credit & Microfinance, History of Gorizia

El estudio analiza una de las intervenciones del Gobierno dominicano en el ámbito de la política social para el desarrollo de capacidades e incremento de capital humano. Es un estudio sobre los Centros de Capacitación y Producción Progresando (CCPP), una de las intervenciones estratégicas del programa Progresando con Solidaridad (Prosoli) que dirige la Vicepresidencia de la República a través del Gabinete de Coordinación de Políticas Sociales (GCPS). El trabajo ofrece una mirada cualitativa a la percepción de los participantes sobre los centros, examinando las valoraciones a la oferta formativa, a la gestión de los centros, y al impacto en la calidad de vida que ha tenido una formación adquirida en un CCPP.

Angulo Salazar, Lourdes del Carmen Microfi nanzas y empleo rural: experiencias y lecciones en una región de Jalisco, México / Lourdes del Carmen Angulo Salazar. -1a ed . -Ciudad Autónoma de Buenos Aires: Elaleph.com, 2015. 178 p.; 21 x 15... more

- by Lourdes Angulo Salazar
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- Rural Credit & Microfinance

This micro-level study combines multivariate and qualitative analyses to highlight the fragmented
nature of debt in southern Indian rural households. It finds that debt is socially regulated in the sense that social
interactions shape the cost, use and access to debt. Caste, social class and location affect how individuals
borrow varying amounts from distinct money providers, for varied purposes and at differing costs. Debt thus is
not purely an economic but first and foremost a social transaction which inscribes debtors and creditors into
local systems of hierarchies. Furthermore, we find that debt is an illustration and catalyst of broader socioeconomic
and political trends, namely a lack of social protection, persistent under-employment and rising
consumerism. In terms of policy implications, the study highlights the ambiguities and illusions inherent to
‘financial inclusion’ policies aiming to eradicate informal debt.

- by isabelle guérin
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- Gender and Development, Rural Credit & Microfinance, Debt, Microfinance in India

The results show that MFIs clients' preferences are driven by economic (low interest rates, low collateral and size of loan) and non-economic factors (such as quality of services variables; easiness, speed, nearness, payment method and loan officers' profile). The results also indicate that BRI, a conventional MFI, is ranked the most competitive according to these factors, followed by BPRS (Islamic rural banks), BPR (conventional rural banks) and BMT (Baitul Maal wa Tamwil).

- by Dian Masyita
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- Finance, Accounting, Microfinance, Islamic Finance

Promoting small and medium size enterprises is a governmental strategy aimed at achieving national economic development through poverty allevia-tion, employment creation and other income generation activities. This study examined the determinants of small and medium size enterprises access to credit schemes around Mezam Division located in the North West Region of Cameroon. A two-stage sampling technique was used to obtain data from over 294 enterprises. Descriptive statistics and logit regression analysis were used to analyze the data. Results revealed that 5.8% of the small and medium size enterprises had accessed bank credit only while 92.2% obtained finance from informal credit sources. The logit analysis indicated that access to formal credit was determined by the educational level of the enterprise owner or manager, longevity in business, and the availability of collateral security. Government policies with respect to credit access by enterprises should be involved and begin from both lenders and creditors.

- by beckline mukete
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- Economics, Microfinance, Poverty Reduction Strategies, Cameroon

India saw big gains in financial inclusion with the implementation of the Pradhan Mantri Jan Dhan Yojana. JAM (Jan Dhan-Aadhaar-Mobile) trinity, an initiative by Government of India to link Jan Dhan accounts,
Mobile numbers and Aadhaar cards of Indians to directly transfer subsidies to beneficiaries and eliminate intermediaries and leakages, is nothing short of a social revolution. The schemes which have followed since then have not only aimed for financial inclusion but also to ensure inclusive growth. There is a strong correlation between financial exclusion and poverty and inequality. Till late 2013, according to Ministry of Finance, 45% of urban and 52% of rural households did not have bank accounts. However, financial inclusion is not just about opening of
bank accounts but also access to credit from formal sources. In India with a large rural population, financial exclusion has both geographic and social dimension. Although financial inclusion initiatives started in 1955, gathering momentum with nationalization of private banks in 1969 and 1980, the objective of nationalization was limited to extending bank activities to the unbanked population. Many other factors such as poverty, low-income, distance from bank etc., restricted the rural and vulnerable sections including women from getting access to formal banking system. According to the Census 2011, nearly 73% of farm households did not have access to formal credit sources. However, some 300 million new bank accounts were opened under the Jan Dhan Yojana.

- by Arunav Chetia
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- Social Sciences, Rural Development, Mobile Banking, Financial Inclusion

Pakistan has made considerable developments in Microfinance though a late starter in this industry. The sector formally started to develop from 1999 although; semiformal sectors since the 1980s are providing micro-credit in Pakistan. Including Non-Government Organizations (NGOs) and Rural Support Programs (RSPs). Subsidies have played an important role in the growth and promotion of the microfinance sector's growth phase. Now the sector is in its maturity phase. MFBs funding structure suggests lack of own-resource base through deposits mobilization. For long-term sustainability, Financial Self Sufficiency is vitally important for microfinance institutions

- by Ayesha Majid
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- Business, Microfinance, Islamic Microfinance, Rural Credit & Microfinance

There is a correlation between poverty and the disempowerment of women, especially in poor families. As a poverty reduction tool, microfinance is a terrace to get out of poverty and to ensure women's empowerment. Microfinance can be considered as the rock breaker in the maledominated patriarchal society. This study found that after joining ASA's microfinance program, the household's monthly income, expenditure, and savings of respondents were increased. Involvement with ASA's microfinance was found to have a mixing effect on the fulfillment of the basic needs. According to some studies, microfinance is seen as a way to free women from captivity within the four walls through contributing to the family economy and some studies do not agree with this conclusion. The present study found that the respondents appeared to be empowered with regard to the socioeconomic and political indicators such as the decision on voting, access to land assets, social mobility, decision on medical treatment, and access to cash. In respect of decision on family matters, the decision on the use of ASA's loan and the actual user of loans, this study found male domination rather than the female, who is the microfinance borrower. This study stated that as the women got older the effect of age was less meaning that elderly women had less bargaining power within the households or in other words, they are less empowered. The empirical results indicated that the length of ASA membership had a statistically significant impact on women's empowerment. The level of female education was also an important phenomenon for empowering women.

The dismal performance of the conventional finance sectors triggered the advocation of micro-financing by
policy makers, practitioners, and international organizations as a tool for poverty reduction. The essence was to
reach the overwhelming population of the poor to assist in the drive to alleviate poverty. The paper examines the
challenges and prospects of microfinance institutions in Ghana. Relevant literatures were reviewed to bring out
salient issues on the subject matter of this paper. The chief source of information for this write up is secondary
method of data collection. It was discovered that the key constraints faced by MFIs in Ghana include poor
regulatory environment, regular vicissitudes in government policies, paucity of capital, inadequate skills and
professionalism, infrastructural inadequacies, socio-cultural misconceptions, corruption, frauds and forgeries and
poor corporate governance. Despite this plethora of challenges, the study identified growing entrepreneurial
awareness, increasing government interest, large unbanked and/or underserved rural area and high population of
poor and low income households and their microenterprises as opportunities that exist for MFIs subsector. This
paper recommends among others, establishment Microfinance Development Fund to support capacity building
for the sub-sector on an on-going basis, establishment of National Deposit Insurance Corporation to improve
public confidence and trust in MFIs subsector and provision of adequate logistics such as telecommunications
and information technology to support the operations of MFIs and make them more efficient in rendering
affordable services.
Keywords: Microfinance, Poverty, Capacity Building and Strategy, Rural Development, Challenges

- by Akwasi Addai Boateng
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- Rural Credit & Microfinance

This article examines the role of gender in the use of digital finance in Kenya, including the well-known case of mobile money but also the emerging use of smartphone apps, payment tills, digital credit services, and digital fund-raising computer programs. Development professionals have explicitly feminist goals in bringing digital finance to women in the Global South. In several recent reports, they outline the belief that gender norms are a barrier to women's use of finance. They hope digital finance will bring women agency and control over money and consequently shift restrictive gender norms. This article offers a critique of these assumptions based on ethnographic conversations, a diary exercise, and network self-portraiture conducted in Kenya in 2016 among both rural farmers and urbanites. Adopting a distributed agency perspective, the ethnographic study demonstrates that Kenyan women and men use digital finance not to seek individual control of their money but to produce themselves as connected and trustworthy members of financial groups and collectivities. Gender norms may not hinder women from finance but rather enhance and deepen women's and men's financial relationships and bring women success in amassing funds.

- by Sibel Kusimba
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- Economic Sociology, Rural Sociology, African Studies, Gender Studies

Free market economy has never been in practice since the perfect competitive market is just an ideal situation. It is the economic creator of classes dividing human beings in different layers. The corporate regime came about with the neoliberal economic theory which is motivated by efficiency and trade liberalization. 'Supermarket revolution' for privileged consumers further constructed the division of farmers and consumers advancing 'new international division of labour'. Their economic power turns into the political power. The economic crisis was the result of neoliberal policy. It regenerated neoliberal atrocities and failed to improve human wellbeing at scale. State capitalism emerged as the alternative system: a compromise between competitive capitalism and socialism. However, it has several limitations. The protectionism stimulates left out people for economic growth. Egalitarian society from bottom to top is the basic part of the protective liberalism. It is neither anti-capitalism nor anti-socialism, rather the basic foundation for the transformative democracy.

India saw big gains in financial inclusion with the implementation of the Pradhan

- by Arunav Chetia
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- Microfinance, Rural Development, Mobile Banking, Financial Inclusion

This work deals with peasant farmers in Kibaale District, Southern Uganda, who have chosen to participate in mainly local organized savings and credit groups. Their goals reach from micro insurance in case of sicknesses or death, up to investing in their household development through buying costly household items and practicing gift exchange. These groups are compared to an example of a MFI women's group. The aim of the work is to show how principles of entrustment and obligation work in credit relationships and how the participation in savings and credit groups has impact on the social life of its members.

Microfinance has been addressed as a mechanism to increase financial access to the poor as one of the sustainable development goals. Accordingly, a more comprehensive understanding of the determinant factors of microfinance sustainability is necessary to implement further these financial institutions in rural areas. This research seeks to develop sustainability microfinance models and policy formulation to alleviate poverty in rural communities in East Sumba. We collect the data by distributing questionnaires to 148 stakeholders of the Tapa Walla Badi microfinance group in Mbatakapidu and the Rinjung Pahamu microfinance group in Wangga village. Focus group discussions in those locations supplement the data from the questionnaires. The endogenous and mediating variables of this study are microfinance sustainability and governance factors, respectively. Meanwhile, the exogenous variables are social, economic, and environmental factors. We then quantitatively analyze the data by using structural equation modeling (SEM) through the analysis of moment structures (AMOS). The findings show the mediating role of governance factors in microfinance sustainability. To do so, the MFIs need to maintain their positive attitudes towards the environment and implement green practices to achieve sustainability. The last but not least, this study provides empirical evidence regarding the level of adaptation of small-scale MFIs to green MFIs. Thus, the transformation process towards a green MFI can survive in the long-run through good governance support. The MFIs can oversee the process by initiating green practices and launching environment-based loan products.

- by Apriani Dorkas Rambu A. and +1
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- Microfinance, Rural Credit & Microfinance, Economics of Microfinance

Many poor households in the developing world supplement their limited incomes with remittances and microfinance. Much of the literature assumes upward social mobility and economic development from increased household expenditures in nutrition, health, education, and housing driven by remittances and/or microfinance. The New Economics of Labor Migration theory states that, faced with limited access to local capital, credit, and insurance products, working-age people may emigrate to increase their household income, but what happens when people emigrate from rural communities that increasingly have access to credit through microfinance? This chapter investigates the simultaneous impact of microfinance and remittances on the livelihood of Nepalese people by using the 2003–2004 Nepal Living Standard Survey. We find that microfinance is positively associated with an increase in the proportion of household income used for health-care expenses and negatively associated with the percentage of income used for food expenses and housing improvements. Remittances are positively associated with increased expenses for children’s basic education and negatively associated with higher percentages of household income going toward food expenses. The models presented control for social factors such as gender, caste, and ethnicity; education and marital status of the household head; and the number of dependents. The findings and discussion provide insights into the nexus of microfinance, remittances, and livelihoods. An interesting gendered dynamic appears in some households where women apply for microcredit, which they pay for with remittances sent by male household members.

- by Bishal Kasu and +2
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- Development Studies, Microfinance, Nepal, Sociology of Development

La utilización del “financiamiento verde” para los hogares, no se haría directamente desde la emisión de los bonos verdes. El dinero adquirido por la emisión de bonos verdes, debería tener como destino microfinancieras que financien la adquisición de kits de autoabastecimiento de electricidad usando energía solar. Actualmente, el marco normativo nacional promociona la utilización de energías renovables como la fotovoltaica, sin embargo, ésta está principalmente destinada a que las grandes empresas de generación de electricidad
cambien sus fuentes de generación hacia el uso de energía solar, eólica, u otras de origen renovable.
El que la gran industria de generación de electricidad cambie su fuente de abastecimiento, no necesariamente se ha traducido en una reducción de la tarifa que paga el usuario, pero esto sí sucede cuando el usuario es dueño de un kit de autoabastecimiento de electricidad, por medio del uso de paneles solares, inclusive es posible pensar en la reducción completa del pago la tarifa de luz, si se adquieren los kits que permiten el completo autoabastecimiento.
Para que esto último suceda, se necesita mayor atención a la promoción de un ecosistema, en donde se promueva la participación más activa de agentes que provean los kits de autoabastecimiento, microfinancieras que se animen a financiar la adquisición de esta tecnología verde, y la canalización del fondeo de estas últimas a través de, por ejemplo, bonos
verdes.
Actualmente, existe un incremento importante en las preferencias de los inversionistas por “volverse verde”. Se ha arribado a acuerdos de largo plazo en torno a las contribuciones determinadas a nivel nacional (NDCs por sus siglas en inglés) en el marco del Acuerdo de
París y el logro de estas metas es uno de los más importantes compromisos medioambientales para países, organizaciones y sectores de inversión en sus agendas verdes. Los bonos verdes son un tipo de instrumento financiero acorde con estas metas. Este instrumento financiero está siendo usado en Latinoamérica, principalmente por Brasil y México; esto podría ser una oportunidad para las microfinanzas en Perú, pero necesitará resolver algunas imperfecciones de mercado con el ingreso de nuevos agentes para participar en el sistema financiero verde y con algunos posibles cambios en el marco legal peruano.
Para medir el nivel de avance y viabilidad del mercado peruano para la emisión de bonos verdes en las microfinanzas, se realizará una evaluación cualitativa de la Adaptación del Marco Conceptual elaborado por la Red de Banca Sostenible (Sustainable Banking Network – SBN por sus siglas en inglés) a un grupo de profesionales especializados y se hará un breve ejercicio financiero sobre las posibilidades financieras de la adquisición de los kits que permiten el completo autoabastecimiento eléctrico usando energía solar, por un hogar promedio frente a seguir pagando una tarifa mensual a una empresa eléctrica.

- by Miguel A . Macedo Zegarra
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- Economics, Renewable Energy, Microfinance, Electrical and Electronics

The comprehensive Financial Inclusion plan declared in India by our honourable Prime Minister Shri Narendra Modi has emerged as a major policy objective. The microfinance sector plays a significant role in fostering inclusive growth by offering loans, credit, savings and other basic financial services to borrowers at the bottom of the economic pyramid. Inclusive growth simply means all round growth of the masses. Microfinance and inclusive growth ensure the economic and the financial progress by bridging the gap between the formal financial institutions and the poor sections of the society resulting in balanced and optimal growth. In this paper, author provides an overview of India's microfinance industry, its position and significance in economic development, prevalent models for the microfinance disbursement, potential for growth of microfinance in India, challenges of microfinance in India and the suggestions to overcome these challenges.

MSMEs are particularly important for emerging countries. This is primarily because of MSME's potential in job creation. Yet, lack of access to finance is a major obstacle to their growth. The average (i.e., mean) time taken to set up a business in India was 118 days, with a wide variation across states. It took, on average, 63 days to set up a business in Tamil Nadu and 67 days in Andhra Pradesh whereas for Kerala and Assam, firms took 214 days and 248 days respectively. In addition to limited development of industries in NER, there is limited availability of data on whatever industries exist there. Around 54 per cent of industrial units are concentrated in Assam among NE states. There were 37,356 registered MSME units in Assam providing employment to 2.05 lakh persons till the end of March 2013. Formal lending sector is always preferred over informal sector for the MSMEs because of the credibility of such lending institutions. MSMEs need special credit policy especially at the start-up stages. Though registration of the firm is not compulsory for the MSME units, doing so is beneficial for the economy and the MSMEs. The study tries to find out the characteristics of MSMEs operating under rural villages in Assam whether registration with DIC has helped them to overcome problems associated with obtaining credit from banks. From the analysis of data collected, it has been observed that registration has no influence over satisfaction of borrowers over the source of finance, satisfaction with amount sanctioned and the average difficulty in obtaining loans from bank. The registration was seen to have influence only over time taken to sanction loans.

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- by Ashutosh K U M A R Jha and +1
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- Microfinance, Rural Credit & Microfinance, Microfinance Institutions, Microfinance and women's empowerment

- by Ernesto Castaneda
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- Development Studies, Microfinance, Nepal, Sociology of Development

La agricultura es considerada como una actividad de carácter estratégico debido a su condición de productora de los alimentos para satisfacer las necesidades de la población de un país. En el caso particular de Venezuela Abreu et al. (1993) señalan que, durante el lapso 1970-1992, el comportamiento del abastecimiento alimentario se caracterizó por una fuerte correlación entre los aumentos de las importaciones y los aumentos en la disponibilidad agregada de alimentos. Entre tanto, en ese intervalo la producción agrícola nacional no disminuyó en la mayoría de los años, a pesar del fuerte impacto de las importaciones como estrategia de abastecimiento. Recientemente este carácter fue recogido en el marco legal venezolano al incorporar el concepto de seguridad alimentaria en la Constitución Nacional de 1999. En otro orden de ideas, durante décadas, tanto el Estado como el sector privado han invertido recursos financieros para apoyar las actividades de producción del sector agrícola en el país. Sin embargo, una primera aproximación al análisis del desempeño financiero y productivo del sector permite formular interrogantes como las siguientes: ¿Cuáles fueron las políticas públicas implementadas en Venezuela en las últimas décadas para el financiamiento del sector agrícola?; ¿Qué instituciones públicas fueron las responsables de ejecutar la política de financiamiento al sector?; ¿Qué papel desempeñó la banca privada en su financiamiento?; ¿Ha sido el financiamiento otorgado al sector agrícola factor clave en el incremento de la producción?; ¿Cuál ha sido la eficiencia en el uso de los recursos otorgados?; ¿Existe evidencia de que a mayor cantidad de recursos invertidos hayan aumentado los niveles de producción?; ¿Se puede generar un indicador que mida esta relación y que permita realizar el seguimiento de las políticas de financiamiento en el ámbito nacional?
Para dar respuesta a estas interrogantes se realizó una investigación documental descriptiva y explicativa, cuyo objetivo general consistió en determinar el impacto que los recursos financieros otorgados mediante el crédito agrícola, provenientes tanto de las instituciones públicas nacionales como de la banca privada, han tenido en la producción agrícola venezolana durante el período 1970-1999. El lapso seleccionado corresponde a las tres décadas ubicadas entre los años 1970 y 1999, fundamentalmente debido a dos razones: i) fue a partir de la década de 1970 cuando la ingente cantidad de ingresos petroleros permitió al Estado venezolano destinar parte de ellos al sector agrícola, por la vía del financiamiento directo a la producción primaria; ii) por tratarse del periodo más reciente para el cual existe información cuantitativa disponible, particularmente con respecto a las variables antes señaladas. Existen dos argumentos teóricos fundamentales en los cuales se sustenta esta investigación. En primer lugar se basa en el planteamiento sostenido, entre otros, por la FAO (1995a) de que la economía financiera influye en la economía real. En este caso se esperaría que exista una relación proporcional positiva entre los recursos financieros otorgados al sector agrícola mediante créditos, tanto de las instituciones públicas de financiamiento como de la banca privada (economía financiera) y la producción del sector agrícola (economía real). En segundo lugar se basa en la definición de dos paradigmas fundamentales en las finanzas rurales (FAO, 1995a) y, particularmente, en uno referido a las Instituciones Especializadas de Crédito para la Agricultura (IECA). Con base en este paradigma se diseñaron y estructuraron las instituciones públicas de financiamiento al sector agrícola venezolano durante el período de estudio, el cual estuvo caracterizado por la intervención del Estado en la formulación y ejecución de las políticas públicas en materia económica y financiera dirigidas a este sector de la economía nacional.
El libro que se presenta se ha organizado en ocho capítulos, cada uno de los cuales trata los aspectos siguientes: En el Capítulo I, tomando como referencia al campo de las finanzas se presenta la coyuntura del crédito agrícola en Venezuela, formulándose las preguntas que dieron origen al trabajo de investigación y cuyo producto es esta obra que presentamos. La investigación se diseñó de tipo descriptiva y explicativa, basada en la estrategia de investigación documental para la descripción de las políticas económicas y financieras y la caracterización de las instituciones públicas de financiamiento. Asimismo, para el análisis de los datos estadísticos se utilizó la actualización a valores constantes de 1984 de las series de crédito público y privado y de la producción del sector agrícola venezolano, igualmente se emplearon tasas de crecimiento interanual, tasas medias de crecimiento, tanto para el lapso de estudio como por períodos presidenciales y el análisis de correlación y regresión. El Capítulo II comprende una síntesis de los fundamentos teóricos que sustentan este libro. Entre ellos se incluyen aspectos relacionados con el crédito, el crédito agrícola y su interacción con la dinámica productiva y el paradigma de las Instituciones Especializadas de Crédito para la Agrícola (IECA). Por otra parte se incorpora el concepto de la producción en el sector agrícola y los modelos de medición utilizados en la investigación. En el Capítulo III se realiza una descripción de las principales políticas económicas y financieras destinadas al sector agrícola en Venezuela durante el período de estudio, presentadas por períodos constitucionales. Al final del Capítulo se incluye un cuadro resumen con las principales políticas económicas y financieras aplicadas durante el período 1970-1999. La caracterización de las instituciones públicas para el financiamiento agrícola en Venezuela a lo largo del período de estudio se realiza en el Capítulo IV. En él se resumen las principales características institucionales, tales como: marco legal de su creación y extinción, funciones y objetivos, programas de crédito, condiciones y garantías exigidas para el financiamiento, entre otras. El Capítulo V presenta un análisis descriptivo de la evolución del crédito agrícola otorgado por las instituciones financieras públicas en Venezuela. Este análisis se realiza tanto para el período 1970- 1999, como para cada uno de los períodos constitucionales incluidos en el mismo. El comportamiento de la cartera agrícola mantenida por la banca privada se analiza en el Capítulo VI. Al igual que en el capítulo anterior, se consideró la evolución de la variable para todo el período de estudio y para los períodos constitucionales por él abarcados. En el Capítulo VII se analiza el comportamiento de la producción agrícola en Venezuela, considerando los subsectores agrícola animal, agrícola vegetal y pesquero. Este análisis se efectuó considerando las variables Valor de la Producción y Producto
Interno Bruto Agrícola.
La medición y el análisis del impacto que los recursos financieros otorgados mediante el crédito agrícola otorgados tanto por instituciones públicas nacionales como por la banca privada tuvieron en la producción agrícola venezolana durante el período 1970-1999, se desarrolla en el Capítulo VIII. Esto responde de manera directa al objetivo general de la investigación. Como colofón del trabajo se presenta una serie de hipótesis que intenta explicar las razones por las cuales, a pesar de que la variable crédito público agrícola mostró una tendencia decreciente durante el periodo estudiado, la producción agrícola mostró una tendencia creciente, sugiriendo una relación inversa entre ellas, contraria a lo esperado a priori al nivel teórico. A partir de esas hipótesis se delinean nuevas relación crédito agrícola-producción agrícola, en particular, así como del mercado financiero rural en países en desarrollo, en general.

- by Daniel Anido and +1
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- Agricultural Development, Microfinance, Rural Credit & Microfinance, Finance and banking
- by Alexandre Berthaud
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- Microfinance, Financial Inclusion, Rural Credit & Microfinance

The most fundamental fact of life in our world today is change. As a rule, people are reluctant to change. We resist it. It has to do with staying in our comfort zone, which is part of human nature. Throughout human history, as changes have come to light, people have run around blowing out candles and throwing the switches, demanding continued darkness. In almost every field of endeavor ---the arts, sciences, medicine, business ---most new ideas have always met with resistance and rejection at first. And the more unique and revolutionay idea, the more sweeping and vast the change, the louder and stronger people's opposition to it.