Joint-liability borrowing decisions under risk: Empirical evidence from rural microfinance in Ethiopia

This paper investigates borrowing decisions of rural households from a microfinance in Tigray, Ethiopia using household panel data on 5 years and a dynamic panel probit model. The theoretical model takes two types of risk involved in joint-liability lending explicitly into account: risk of partner failure and the risk of losing future access to credit. Empirical results show that these risks are important in explaining borrowing decisions. Another finding is that the probability of repeat-borrowing is higher than the probability of new participation, with possible implications that perceived joint-liability threats deter participation and easing stringent punishments might help poor households’ access to credit.Microfinance, risk, dynamic panel probit, Financial Economics,

Econometric analyses of microfinance credit group formation, contractual risks and welfare impacts in Northern Ethiopia

Key words Microfinance, joint liability, contractual risk, group formation, risk-matching, impact evaluation, Panel data econometrics, dynamic panel probit, trend models, fixed-effects, composite counterfactuals, propensity score matching, farm households, Ethiopia. Lack of access to credit is a key obstacle for economic development in poor countries. The underlying problem is related to information asymmetry combined with the poor’s lack of collateral to pledge. New mechanisms in microfinance offer ways to deal with this problem without resorting to collateral requirements. The objective of this thesis is to examine the mechanisms of providing credit through microfinance and assess the long-run borrowing effects on household welfare in Ethiopia. The Ethiopian environment provides a suitable setting to examine these issues. To meet this objective, two unique data sets - a five-wave panel data on 400 and a cross-sectional data on 201 households - from northern Ethiopia are used. Borrowing decision is first conceptualized using a dynamic stochastic theoretical framework. Two types of risks involved in joint liability lending are incorporated, i.e., risk of partner failure and risk of losing future access to credit. Empirical analysis using recent dynamic panel data probit techniques show that these contractual risks indeed impede participation in borrowing. The impediment is higher for the poorer, and for new than repeat participants. Second, group formation is analyzed within the framework of alternative microeconomic theories of joint liability where the commonly held hypothesis that groups formed are homogeneous in risk profiles is tested. Empirical results reject this hypothesis indicating that the formation of heterogeneous risk profiles is an inherent feature in group formation and repayment. In fact, there is evidence that borrowers take advantage of established informal credit and saving, and other social networks, which also suggests that group formation outcomes vary depending on underlying socioeconomic contexts. Third, the impact of long-term borrowing on household welfare is assessed from the dimension of intensity and timing of participation in borrowing. Panel data covering relatively long period enabled to account for duration and timing concerns in program evaluation. Recent parametric and semi-parametric panel data techniques are innovatively employed to mitigate participation selection biases. Results from both approaches indicate that borrowing has increased household welfare significantly: the earlier and more frequent the participation the higher the impact partly due to lasting effects of credit. This also suggests that impact studies that are based on a single-shot observation of outcomes and that do not account for the timing and duration of participation may underestimate microfinance credit impacts. </p

Nursing Supervisors Perception on quality of Nursing Care in Ethiopia

Background: The problem of clarifying the nature of the core elements of the nursing profession and the limits of its scope of practice are found in many countries. Additional problem in Ethiopia which should be taken into consideration and thoroughly examined by policy-makers and nurses are the existing imbalances between the numbers, types, functions, istributions, and quality of nursing personnel, on the one hand, and on the other, the country's need for their services and ability to employ, support and maintain them. Guided by this perspective, the purpose of this study were to assess (a) any nursing imbalance and shortage and (b) the quality of nursing education and nursing care in Ethiopia. Methods: A cross-sectional approach was utilized. Health department supervisor nurse (or the equivalent) respondents (n= 70) were recruited from the 11 regional and 59 zonal and 7 special woredas'. Participants completed the Nursing Personnel Resources Survey Questionnaire (NPRSQ). The NPRSQ is a self-administered 51-items instrument for measuring the distribution of nursing personnel; the quality of nursing schools and the relevance of nursing education; the quality of nursing care (relative to a perceived standard); and the status and image of nursing in the country. Results: The most important findings shows a three dimensional nursing workforce imbalances: the numerical dimension involves under-supply compared to country needs and resources; the qualitative dimension represents a mismatch between educational preparation and requirements in the workplace; and the distributional dimension focuses on urban areas and hospitals compared to rural areas and community health care settings. Conclusion: This study does not try to address all the issues related to nursing personnel imbalance. However, regardless of the nature of the nursing situations, this study does show that nursing shortage is associated with quality of care, and quality of care with quality of education. The solution lies in a broad, country-based approach that addresses infrastructure, education, and human resources management. as an interrelated and complex aspects of human resources policy and planning.Ethiop J Health Sci Vol. 11, No. 2 July 200

Implications of groundwater quality to corrosion problem and urban planning in Mekelle area, Northern Ethiopia

Surface and groundwater chemistry being an important factor in urban planning and infrastructure development, present paper tries to present the problems of corrosiveness due to groundwater chemistry in Mekelle city. Iron corrosion in distribution systems and engineering structures are common problems in many urban areas. Corrosiveness of groundwater at different localities in Mekelle and its environs has been evaluated on the basis of AAS-UV spectrophotometer-generated hydro-geochemical data. Corrosiveness of water was estimated by using corrosion indices like Larson Index, LI and Aggressive Index, AI and total dissolved solids, total carbonate hardness, chloride and sulphate data were evaluated to estimate aggressiveness of the water samples on iron pipes. Analyses of the results have shown that most of the samples from boreholes and hand dug wells compared to spring samples, are potentially aggressive. The result shows that 66.7% spring, 81.3% shallow hand dug wells and 81% borehole water samples have a Larson index (LI) above 0.5, a threshold of corrosiveness of water. This study highlights the basic characteristics of surface and groundwater chemistry and its potential hazard for corrosion of pipes, and provides a baseline information and awareness to the city planners for urban management

Commercialization of vegetable production in Alamata Woreda, Northern Ethiopia: processes and impact

The Raya valley in Tigray where Alamata Woreda is located, has fertile soil, suitable climate and rich water resources to grow various crops including vegetables. Surface water from seasonal rivers/streams and small dams and ground water extracted from deep and shallow wells with various water lifting devices are the two main sources of water for irrigation in the Woreda. A participatory rural appraisal (PRA) study conducted by the Woreda stakeholders and facilitated by IPMS identified (irrigated) vegetables as a potential marketable commodity in 2005. Using the commodity value chain approach, production, input supply and marketing problems and opportunities were identified. Major problems were lack of interest partly as a result of market failure in the past, lack of agronomic and irrigation knowledge and skills resulting in lack of use of advanced agronomic inputs (e.g. seeds) and underutilization of modern irrigation facilitates (most of the deep wells established were not used and/or underutilized). Different extension approaches were used including study tours to change the mind-set and to acquire knowledge for experts and farmers. Following various production interventions, market linkages were created which resulted in better prices (from 0.70Birr/kg before 2005 to 3-5Birr/kg in the following years). Farmer to farmer communications, trainings, workshops and media coverage facilitated the further dissemination of knowledge and skills between PAs in Alamata and neighboring Woredas. As a result of these interventions, the area of irrigated onion, pepper and tomato tripled in size from 351 ha in 2004/05 to 1113 ha in 2008/09. The lion share of this increase was due to a ten fold increase in onion area from 84 ha in 2004/05 to 824 ha in 2008/09. Most of this increase took place in the spate irrigated areas where plots previously used for cereal crops (sorghum and teff) were converted to vegetables. Both women and men farmers benefited from the intervention. Many farmers managed to construct houses in town and were able to own different assets. The further expansion of the (irrigated) vegetable production in Alamata is feasible. However, more attention needs to be paid to improving productivity, especially in the spate irrigated areas since no clear evidence was found that area increase was accompanied by productivity increase, indicating lack of adequate institutional and farmers’ knowledge and skills. Also adverse weather conditions during the 2008 harvesting season, resulted in considerable crop spoilage and lower prices – indicating the risk associated with this commodity under rain-fed conditions. Finally, potential salinity problems should also be taken into account

The effects of dual micronutrient supplementation on thyroid function in school children: An experimental study

Background: The presence of iron and or vitamin A deficiency in children limits the effectiveness of the iodine intervention program in areas where iodine deficiency is endemic. This study was aimed at assessing the role of dual micronutrient supplementation on thyroid function in severe iodine deficient school children age 6-16 years in Ethiopia.Methods: From 2006 to 2007 an experimental study was conducted on 397 children, all with visible goiter grade of which 6.1% and 10.3% vitamin A and iron deficient respectively. A week after baseline data collection and de-worming, all children with visible goitre (n=332) but without iron and vitamin A deficiency were randomly grouped into four, A to D groups. Vitamin A deficient children (n=24) were randomly allocated to group A and group B while anaemic children (n=41) were distributed into group C and group D. Group A received 400mg oral iodized oil and group B received 200,000IU vitamin A plus 400mg oral iodized oil. Group C received 400mg oral iodized oil while group D received 100mg iron sulphate with folic acid and 400 mg oral iodized oil. Iron supplementation was continued two doses per day for six weeks. Vitamin A supplemented group received additional dose at six month. Post intervention data on iodine, vitamin A and iron status were collected at 6 and 11 month.Results: Children supplemented with iron + oral iodized oil capsule had significant goitre reduction than oral iodized oil supplemented group. The mean concentrations of thyroid hormone (T4) and Urinary iodine excretion (UIE) in iron + iodine supplemented group were significantly higher than the iodine alone supplemented group at 6 months after the intervention. Hemoglobin level at baseline in all study subjects and at 11 month after intervention in group D (iron + iodine supplemented group) significantly (P&lt;0.05) correlated with T4 level. The significant goitre reduction in iron + iodine supplemented group than iodine alone supplemented group and significant correlation between level hemoglobin and T4 at baseline and at 11 month after intervention probably indicate that iron and iodine have a functional interaction in thyroid iodine metabolism.Conclusion: Supplementation of iodized oil with Iron is more effective in goitre reduction than iodine alone and this should be taken into consideration by iodine deficiency disorders (IDD) intervention programs

Assessing the Long-term Impact of Microcredit on Rural Poverty: Does the Timing and Length of Participation Matter?

In recent years, microfinance institutions are seen as beacons of hope to help eradicate poverty through, among others, providing credit to poor rural households. Availability of small but repeated loans is, in the long-term, expected to impact on poverty. However, decades after the introduction of microfinance institutions into many rural areas, there are still questions as to what extent such long-term benefits are realized. This is because evaluating the long-term impact of microfinance provision on household welfare is difficult due to difficulties in controlling for heterogeneities in the borrower pool and subsequent borrowing dynamics. We use four rounds of panel data on rural households in Ethiopia that had access to microfinance credit to assess the long-term impact of credit by explicitly accounting for such borrowing dynamics. In a panel data setting where only the outcome variable is time-varying, potential future paths of individuals in the control group are considered to account for counterfactuals. Matching is used to adjust for initial differences between participants and controls. These combined methodological innovations enable us to overcome biases due to selection as well as problems of accounting for dropouts and new participants in microfinance impact assessments. Results suggest that the timing of membership matters: the earlier the onset of membership the better the effect. Results are robust compared to standard matched pairwise effects. The overriding implication from this comparison suggests that not accounting for future counterfactuals, for the most part, can lead to biased estimates and overestimates of the impact of credit on household welfare

Computation of Atmospheric Concentrations of Molecular Clusters from ab initio Thermochemistry

The computational study of the formation and growth of atmospheric aerosols requires an accurate Gibbs free energy surface, which can be obtained from gas phase electronic structure and vibrational frequency calculations. These quantities are valid for those atmospheric clusters whose geometries correspond to a minimum on their potential energy surfaces. The Gibbs free energy of the minimum energy structure can be used to predict atmospheric concentrations of the cluster under a variety of conditions such as temperature and pressure. We present a computationally inexpensive procedure built on a genetic algorithm-based configurational sampling followed by a series of increasingly accurate screening calculations. The procedure starts by generating and evolving the geometries of a large set of configurations using semi-empirical models then refines the resulting unique structures at a series of high-level ab initio levels of theory. Finally, thermodynamic corrections are computed for the resulting set of minimum-energy structures and used to compute the Gibbs free energies of formation, equilibrium constants, and atmospheric concentrations. We present the application of this procedure to the study of hydrated glycine clusters under ambient conditions

Computation of Atmospheric Concentrations of Molecular Clusters from \u3cem\u3eab initio\u3c/em\u3e Thermochemistry

The computational study of the formation and growth of atmospheric aerosols requires an accurate Gibbs free energy surface, which can be obtained from gas phase electronic structure and vibrational frequency calculations. These quantities are valid for those atmospheric clusters whose geometries correspond to a minimum on their potential energy surfaces. The Gibbs free energy of the minimum energy structure can be used to predict atmospheric concentrations of the cluster under a variety of conditions such as temperature and pressure. We present a computationally inexpensive procedure built on a genetic algorithm-based configurational sampling followed by a series of increasingly accurate screening calculations. The procedure starts by generating and evolving the geometries of a large set of configurations using semi-empirical models then refines the resulting unique structures at a series of high-level ab initio levels of theory. Finally, thermodynamic corrections are computed for the resulting set of minimum-energy structures and used to compute the Gibbs free energies of formation, equilibrium constants, and atmospheric concentrations. We present the application of this procedure to the study of hydrated glycine clusters under ambient conditions

Mismatch between soil nutrient requirements and fertilizer applications: Implications for yield responses in Ethiopia

Lack of accurate information about soil nutrient requirements coupled with limited access to appropriate fertilizers could lead to mismatch between soil nutrient requirements and fertilizer applications. Such anomalies and mismatches are likely to have important implications for agricultural productivity. In this paper we use experimental (spectral soil analysis) data from Ethiopia to examine farmers’ response to soil nutrient deficiencies and its implications for yield responses. We find that farmers’ response to macronutrient (nitrogen and phosphorus) deficiencies is not always consistent with agronomic recommendations. For instance, we find that farmers in our sample are applying nitrogen fertilizers to soils lacking phosphorus, potentially due to lack of information on soil nutrient deficiencies or lack of access to appropriate fertilizers in rural markets. On the other hand, farmers respond to perceivably poor-quality soils and acidic soils by applying higher amount of nitrogen and phosphorus fertilizers per unit of land. We further show that such mismatches between fertilizer applications and soil macronutrient requirements are potentially yield-reducing. Those farmers matching their soil nutrient requirements and fertilizer application are likely to enjoy additional yield gains and the vice versa. Marginal yield responses associated with nitrogen (phosphorus) application increases with soil nitrogen (phosphorus) deficiency. Similarly, we find that farmers’ response to acidic soils is not yield-enhancing. These findings suggest that such mismatches may explain heterogeneities in marginal returns to chemical fertilizers and the observed low adoption rates of chemical fertilizers in sub-Saharan Africa. As such, these findings have important implications for improving input management practices and fertilizer diffusion strategies