708 research outputs found
Rethinking Microfinance in a Dual Financial System: An Agent-based Simulation
Critics concerning the real impact of traditional microfinance as a tool for poverty alleviation are becoming frequent. In contrast, the financial crisis brought out interest for Islamic finance, whose models have been increasingly studied. Today, the real challenge lies in evaluating the impact of microfinance in a complex environment, where both Islamic and conventional microfinance institutions exist and address evolving clients in constant interaction. New methods and models are therefore needed in order to test the efficacy and assess the impact of introducing Islamic microfinance products, compared to the conventional system. In this context, this paper proposes an approach to build an Agent-Based Modeling (ABM) framework, which is aiming to test the effects of such products implementation using Islamic interest-free group loans. It also helps assess the impact of the behavioral biases as well as agents’ interactions within the repayment process.JEL Codes - C63; G2
Remittance flows to post-conflict states: perspectives on human security and development
This repository item contains a single issue of the Pardee Center Task Force Reports, a publication series that began publishing in 2009 by the Boston University Frederick S. Pardee Center for the Study of the Longer-Range Future.Migrant remittances – that is, money or other goods sent to relatives in the country of origin– play an increasingly central role in post-conflict reconstruction and national development of conflict-affected states. Private remittances are of central importance for restoring stability and enhancing human security in post-conflict countries. Yet the dynamics of conflict-induced remittance flows and the possibilities of leveraging remittances for post-conflict development have been sparsely researched to date.
This Pardee Center Task Force Report is the outcome of an interdisciplinary research project organized by the Boston University Center for Finance, Law & Policy, in collaboration with The Frederick S. Pardee Center for the Study of the Longer-Range Future. The Task Force was convened by Boston University development economist John R. Harris and international banking expert Donald F. Terry, and social anthropologist Daivi Rodima-Taylor, Visiting Researcher at the Boston University African Studies Center, served as lead researcher and editor for the report. The Task Force was asked to research, analyze, and propose policy recommendations regarding the role of remittances in post-conflict environments and their potential to serve as a major source of development funds. The report’s authors collectively suggest a broader approach to remittance institutions that provides flexibility to adapt to specific local practices and to make broader institutional connections in an era of growing population displacement and expanding human and capital flows. Conditions for more productive use of migrants’ remittances are analyzed while drawing upon case studies from post-conflict countries in Africa, Asia and Latin America.
The papers in this Task Force Report establish the importance of remittances for sustaining local livelihoods as well as rehabilitating institutional infrastructures and improving financial inclusion in post-conflict environments. Highlighting the increasing complexity of global remittance systems, the report examines the growing informality of conflict-induced remittance flows and explores solutions for more efficient linkages between financial institutions of different scales and degrees of formality. It discusses challenges to regulating international remittance transfers in the context of growing concerns about transparency, and documents the increasing role of diaspora networks and migrant associations in post-conflict co-development initiatives. The Task Force Report authors outline the main challenges to leveraging remittances for post-conflict development and make recommendations for further research and policy applications
Poverty and Low Earnings in the Developing World
More than three billion people are poor by international standards, and essentially all are to be found in the low- and middle-income countries of Asia, Africa, and Latin America. The issues for understanding poverty in the developing world - among them, self-employment and household enterprises, agricultural work, casual employment, and informal work – differ from those in the developed world. Different policy issues predominate: stimulating economic growth, harnessing the energies of the private sector, increasing paid employment, and raising the returns to self-employment. This chapter details how the poorer half of the world’s people work and gives an overview of lessons from around the world on what has helped improve their earning opportunities. The chapter concludes with suggestions for future research
Impact Investments: An Emerging Asset Class
Examines the impact investment market landscape, what makes it an emerging asset class, expectations for financial returns, estimates of potential investment opportunities in specific sectors, and risk management and performance monitoring issues
Evaluating the social performance of microfinance institutions as hybrid organizations
This thesis analyzes microfinance institutions (MFIs) as hybrid organizations that pursue simultaneously a dual mission, balancing financial sustainability and social impact. Due to the dual nature, MFI’s performance is also divided into financial performance and social performance. Research on MFIs’ social performance is still in its infancy. Hence, the aim of the study is to gain a better understanding of MFI’s social performance and its evaluation by considering the influence of MFI’s profit orientation and key stakeholders, and by identifying different dimensions of social performance and methods to evaluate each dimension.
This study was conducted as a qualitative content analysis. The study was based on secondary data, using peer-reviewed academic articles as data. The findings from the data were reflected on the theoretical framework and existing literature.
The findings show that profit orientation and key stakeholders influence MFI’s social performance. Depending on how well MFI’s dual mission is balanced, the profit orientation can have negative or positive influence on social performance. Key stakeholders’ interests influence whether they push the MFI to pursue its social or financial mission. Conflicts may occur between stakeholder groups, which forces the MFI to prioritize some stakeholders’ interests. This also influences MFI’s social performance.
In this thesis, social performance is divided into three dimensions: breadth of outreach, depth of outreach, and social impact. The data provided indicators for each dimension of social performance. However, it was noted that simple indicators are not the best method to evaluate the complex nature of social performance. Therefore, also more complex indices, and certifications and social ratings granted by third parties were proposed as approaches to social performance assessment. It was concluded that future research should develop improved methods particularly for the evaluation of social impact.Tämä tutkielma analysoi mikrorahoituslaitoksia hybridiorganisaatioina, jotka pyrkivät samanaikaisesti toteuttamaan kaksoismissiota, jossa tasapainotellaan taloudellisen kestävyyden ja yhteiskunnallisten vaikutusten välillä. Mikrorahoituslaitosten suorituskyky on myös jaettu taloudelliseen suorituskykyyn ja yhteiskunnalliseen suorituskykyyn. Tutkimus mikrorahoituslaitosten yhteiskunnallisesta suorituskyvystä on vielä varhaisessa vaiheessa. Siksi tämän tutkimuksen tavoite on saada parempi ymmärrys mikrorahoituslaitosten yhteiskunnallisesta suorituskyvystä ja sen arvioinnista ottamalla huomioon niiden tuloshakuisuuden ja keskeisten sidosryhmien vaikutukset sekä tunnistamalla yhteiskunnallisen suorituskyvyn eri ulottuvuudet ja arviointikeinoja kullekin ulottuvuudelle.
Tämä tutkimus toteutettiin laadullisena sisällönanalyysinä. Tutkimus perustui toissijaiseen aineistoon, ja aineistona käytettiin vertaisarvioituja akateemisia artikkeleita. Aineistosta tehtyjä havaintoja heijasteltiin teoreettiseen viitekehykseen ja olemassa olevaan kirjallisuuteen.
Tulokset osoittavat, että tuloshakuisuus ja keskeiset sidosryhmät vaikuttavat mikrorahoituslaitoksen yhteiskunnalliseen suorituskykyyn. Riippuen siitä, kuinka hyvin mikrorahoituslaitoksen kaksoismissio on tasapainossa, tuloshakuisuudella voi olla negatiivinen tai positiivinen vaikutus sen yhteiskunnalliseen suorituskykyyn. Keskeisten sidosryhmien motiivit vaikuttavat siihen, painostavatko ne yhteiskunnallisen vai taloudellisen mission priorisointia. Sidosryhmien välillä saattaa syntyä konflikteja, mikä pakottaa rahoituslaitoksen priorisoimaan tiettyjen sidosryhmien motiiveja. Tämä vaikuttaa myös yhteisenkunnalliseen suorituskykyyn.
Tässä tutkielmassa yhteiskunnallinen suorituskyy on jaettu kolmeen ulottuvuuteen: tavoittavuuden laajuus, tavoittavuuden syvyys ja yhteiskunnallinen vaikutus. Aineisto tarjosi mittareita kullekin yhteiskunnallisen suorituskyvyn ulottuvuudelle. Yksinkertaiset mittarit eivät kuitenkaan ole paras tapa arvioida monitahoista yhteiskunnallista suorituskykyä. Siksi myös monimutkaisempia indeksejä sekä kolmansien osapuolten myöntämiä sertifikaatteja ja sosiaalisia luokituksia ehdotettiin yhteiskunnallisen suorituskyvyn arviointimenetelmiksi. Jatkotutkimuksissa tulisi kehittää paranneltuja menetelmiä erityisesti yhteiskunnallisen vaikutuksen arviointiin
Business Leaders Marketing to Bottom-of-the-Pyramid Consumers in Nigeria
Business leaders often leave more than half of the world\u27s population the bottom of the pyramid (BOP), a $5-trillion market of potential consumers untapped for products and services on account of failing to see BOP markets as profitable for business, yet business leaders who have managed inclusive BOP marketing in Nigeria have experienced profit margins as high as 120%. The purpose of this multiple case study was to explore strategies of business leaders who market to BOP consumers in Nigeria and maintain a profit. The study population consisted of 3 business leaders in the Dallas and Fort Worth metropolitan area who marketed to BOP consumers in Nigeria and maintained a profit. The conceptual framework that grounded the study was BOP marketing theory. Data were collected through semistructured in-depth interviews and company documents, with member checking implemented to strengthen creditability and trustworthiness. Based on the methodological triangulation of the data sources collected, 3 emergent themes were identified following 5 stages of data analysis. The themes were (a) maintain low profit margins in marketing essential items to the BOP in Nigeria, (b) maintain high profit margins in marketing to the non-BOP in Nigeria, and (c) market scaled-down products to the BOP in Nigeria. The findings from this study may contribute to social change by providing insights and strategies for business leaders seeking to prepare for and sustain profitability. The data from this study may contribute to higher profit margins for business leaders as well as job placement and entrepreneurship opportunities for the communities of Nigeria
Institutional entrepreneurship in Mexican small business finance
Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2008."June 2008."Includes bibliographical references.Through a combination of in-depth research and unique loan-level data, this dissertation explores the mechanisms of intentional institutional change. It argues that current accounts of institutions and institutional change require but do not provide a systematic understanding of the role of individuals in processes of change. It then uses two in-depth case studies to explore the mechanisms through which individuals can initiate institutional change. One case is the activation of the small business credit market in Mexico. The second is the expansion of micro credit in the country. Through these cases, the dissertation proposes that, contrary to conventional thinking, institutional change is not rare because institutional entrepreneurs are scarce. In fact, they are quite prevalent. Rather, what is scarce is the required combination of an opportunity for change, individuals who can recognize this opportunity, have the capabilities and skills to pursue it, and are situated in the right structural position to drive a change process. It further argues that successful institutional entrepreneurs are usually situated in positions of middle management, which provide the right balance between a motivation to experiment, access to sufficient resources, and discretion to diverge from norms. Additionally, institutional entrepreneurs tend to have mixed backgrounds with diverse professional trajectories, which allow them to detect opportunities, cross borders, and learn the different languages required to brokerage experimental efforts.by Rodrigo Canales.Ph.D
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Who needs and who wants financial education? A study of the characteristics of Mexican immigrants participating in a financial education program in New York City.
This dissertation explores the characteristics of first generation underserved Mexican immigrants participating in a community-based financial education program in New York City. According to the literature, this group is less likely than other ethnic groups in the United States to have a bank account and understand and utilize other financial services from the financial mainstream. This condition hinders its opportunities for financial stability and socioeconomic development. Using a mixed method study, this dissertation aims to respond who among the population of first generation underserved Mexican immigrants living in New York City decides to attend a voluntary community-based financial education program. This dissertation finds that there are demographic and socioeconomic characteristics that differentiate those participating in the financial education program from the population, and that these participants might not be the ones who need the program the most according to the literature. The results show that these participants are more likely to have a bank account and use other financial services before they start the program. They also possessed basic understanding of financial concepts and the financial system and decided to enroll in the program because they wanted assistance to better utilize the financial services they already have access to. This self-selection problem is consistent with recent research on the subject conducted with other populations. The analysis also shows that the community-based financial education program was successful in teaching lessons about budgeting. This dissertation does not find conclusive evidence that the financial education program led participants to take action to improve their participation in mainstream financial institutions. The data collected also show that the migration status and level of financial literacy differentiate those participating in the mainstream financial system from those who are not. This dissertation adds to the current scholarly discussion on the effectiveness of financial education programs and factors associated with financial literacy and participation in the mainstream financial institutions. Its findings have implications for financial educators, researchers and Mexican immigrants. It offers a series of recommendations for the development and assessment of financial education programs for Mexican immigrants in New York City and other underserved migrant communities. The study concludes that the majority of Mexican immigrants in New York City urgently need financial education, but a self-selected group that might not need it the most, is the one attending community-based programs on this subject. Therefore, financial education programs need to reach out to those that need the program the most and adjust their curricula to serve better those who are participating
Conventional social behaviour amongst microfinance clients
This doctoral thesis inductively explores the role of conventional social behaviour adopted
by individual microfinance clients regarding their influence over their own collective
success as a microcredit group. The collective credit in question is subject to an adaptation
in Mexico of the Grameen Bank lending framework. An analysis is made on the
close interplay between institutional rules, i.e. the repayment conditions imposed by
the microfinance institution (henceforth MFI), and the emergent cooperation and penalisation
mechanisms that are handled by clients themselves to meet their targets. Thus
the research is focused on the clients’ strategies to socially manage debt and defaulters.
In this case study, a socio-economical fieldwork has been completed through surveying
600 microcredit clients, their 2404 active loans, 35 credit officers plus their board of directors.
This took place in the southernmost state of Mexico, Chiapas, from September
2007 to February 2008, and data analysis was carried out during that period until July
2009. All findings were discussed with relevant stakeholders and policy makers. This
proved key in providing influential insights that helped to improve the institutional regulatory
framework. That resulted in a policy change that benefited over 20,000 clients.
Apart from institutional regulations, it has also been observed group-level strategies
devised by microfinance clients themselves to assess and deal with defaulters over time.
These operate independently from the MFI framework as, despite influencing when and
how quotas should be repaid, their criteria is entirely dealt with and evolved within
credit groups. The obtained outcomes from analysing social and financial data include:
• (I) insights backed by empirical data helped to influence an adaptation of the
MFI funding credit policy, so that group structure and conventions are actually
taken into consideration in a bid to foster more successful microcredit groups;
• and (II) an analysis deemed reliable by the stakeholders for policy-making purposes,
which has also guided the development of an exploratory model for simulating
behaviour of how microcredit groups may deal with repayments in adversity.
As a result of having developed this research project, three contributions to knowledge
are discussed in the thesis. These are organised below according to relevant topics.
1. Understanding the behaviour within studied microfinance groups: based on the
analysed evidence, a hypotheses is suggested about how group location and membership
can influence the dynamics of acceptable behaviour regarding defaulters.
2. Informing policy-making with research findings: a demonstration of how stakeholders
can assess the usefulness of knowledge –produced via research– for policymaking
purposes, taking into account the phenomenon’s particular context.
3. The development of an agent-based model (henceforth ABM): application of the
proposed ABM methodology, aimed at strengthening validation throughout the
modelling process with emphasis on use of evidence and stakeholder participation
Finance for Food
Development Economics; Agricultural Economics; Finance, general; Economic Growth; Macroeconomics/Monetary Economics//Financial Economics; Microfinance; Rural Finance; Agricultural Finance; Rural Development; Developing Countrie
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