Factors affecting institutional transformation for regulated MFIs

ArticlePurpose - Regulating microfinance activities has been an important policy concern in improving financial inclusion and extending financial services to all. However, introducing a regulatory framework of any kind pushes targeted institutions to change. In this case, microfinance regulatory framework in Kenya that came to effect in 2008 has created three tiers of microfinance institutions: prudentially regulated deposit-taking institutions, credit only and unregulated informal groups. Those undertaking deposit-taking business were required by this regulation to transform their operations to comply with the requirements. Though many institutions wanted to be allowed to mobilise public deposits, only six institutions had managed to obtain a license in four years after the regulation became operational. The purpose of this research was to establish the factors affecting this microfinance transformation process. Design/methodology/approach – The research was carried out by collecting empirical evidence from microfinance institutions target by regulation in Kenya to establish these factors contributing to the slow phase of transformation. The possibility that the challenges could be affecting both the regulator and institutions being regulated was explored. Findings – This study identifies several important factors affecting the transformation process of microfinance institutions in Kenya. These include the ability to meet capital requirements, restructuring existing ownership and getting new shareholders, ability to raise funds for transformation, acquiring suitable information systems, motivation to be regulated, governance issues and managerial inertia. These factors explain why certain institutions have moved faster than others in the transformation process and why some have opted to remain credit only. Research limitations – The availability of reliable database of microfinance institutions that were a target for this study was a challenge affecting sampling and reach. In addition, data collected was limited to one point of contact yet some factors could relate to operational process. Originality/value – The study broadens research to transformation process of regulated microfinance institutions, factors affecting them and regulatory framework.Purpose - Regulating microfinance activities has been an important policy concern in improving financial inclusion and extending financial services to all. However, introducing a regulatory framework of any kind pushes targeted institutions to change. In this case, microfinance regulatory framework in Kenya that came to effect in 2008 has created three tiers of microfinance institutions: prudentially regulated deposit-taking institutions, credit only and unregulated informal groups. Those undertaking deposit-taking business were required by this regulation to transform their operations to comply with the requirements. Though many institutions wanted to be allowed to mobilise public deposits, only six institutions had managed to obtain a license in four years after the regulation became operational. The purpose of this research was to establish the factors affecting this microfinance transformation process. Design/methodology/approach – The research was carried out by collecting empirical evidence from microfinance institutions target by regulation in Kenya to establish these factors contributing to the slow phase of transformation. The possibility that the challenges could be affecting both the regulator and institutions being regulated was explored. Findings – This study identifies several important factors affecting the transformation process of microfinance institutions in Kenya. These include the ability to meet capital requirements, restructuring existing ownership and getting new shareholders, ability to raise funds for transformation, acquiring suitable information systems, motivation to be regulated, governance issues and managerial inertia. These factors explain why certain institutions have moved faster than others in the transformation process and why some have opted to remain credit only. Research limitations – The availability of reliable database of microfinance institutions that were a target for this study was a challenge affecting sampling and reach. In addition, data collected was limited to one point of contact yet some factors could relate to operational process. Originality/value – The study broadens research to transformation process of regulated microfinance institutions, factors affecting them and regulatory framework

Africa’s Development Debts

Public debt levels in sub-Saharan Africa rose sharply in the wake of the global financial crisis, and a number of countries are now classified by the World Bank and International Monetary Fund as at high risk of debt distress. By contrast with the debt crisis of the 1980s and 1990s, however, concerns were not region wide as recently as early 2020, and the policy environment for growth remains robust for the majority of countries in the region. The external environment nonetheless poses a set of region-wide risks that include the economic effects of the COVID-19 pandemic and are exacerbated by the increase in market-based debt and the retreat of the Paris Club among official creditors. Changes in perceived creditworthiness can now drive distress, and new challenges of creditor coordination will complicate the debt restructuring process. We motivate a research agenda that focuses on development assets at risk as rising debt service obligations crowd out development as well as operational and maintenance budgets. Preserving and enhancing these assets, which include advances in human capital and infrastructure and an improved investment environment, should be a central objective of domestic policy actions, preventative debt restructurings and institutional approaches to debt distress

Effects of market liberalization on food security in Tanzania

A conference paper on the effects of market liberalization on food security in Tanzania.During the past decade, Tanzania has faced an unprecedented economic crisis, characterised by severe balance of payments disequilibrium, high inflation, and large government budget deficits. Population has grown more rapidly than gross domestic product. Shortages of consumer goods were widespread and intermittent food shortage had to be met by food imports. To tackle the economic crisis, government implemented several adjustment and stabilization programmes (Ndulu and Lipumba, 1986). These policies culminated in significant devaluation and the liberalization of imports financed by privately-owned foreign exchange. Restrictions on private trade b food grains were relaxed. In June 1986, the government adopted the World Bank and IMF-supported Economic Recovery Programme (ERP). The policy measures taken included a major devaluation and a crawling peg to correct future overvaluation, control of the growth of government expenditures to reduce and limit government borrowing from the banking system, increases in agricultural producer prices, and further relaxation of restrictions on private trade in major food grains. The policy thrust has been to adopt market-oriented policy instruments and to depend less on state-controlled procedures. Since 1984 government has further liberalized the economy.The research supporting the preparation the proceedings papers was financed by the U.S. Agency for International Development, Bureau of Science and Technology; Bureau for Africa; and the Southern Africa Regional Programme

Impact of market liberalisation on household food security in Tanzania

A conference paper on national food security in Tanzania, presented at The Fourth Annual Conference on Food Security In Southern Africa, 31 October- 3 November, 1988.During the November 1987 Conference on Food Security Research in Southern Africa, we presented a paper on the impact of adjustment and stabilization policies in general, and market liberalisation in particular, on food security in Tanzania. Our 1987 paper included: a brief history of agricultural policy since independence in 1961; an analysis of the characteristics of food consumption in rural and urban areas; a detailed examination of the evolution of the intervention regime and its impact on production, consumption, and food security; and an indepth discussion of the impact of recent adjustment policies and market liberalization on food security. This paper analyses the impact of policy measures since July 1984 on household food security. The paper is divided into four sections. A summary of our 1987 paper and a review of factors affecting food supply in the long- and short-run at the micro level is presented in Appendix I. Section two, a major component of this paper, uses micro-level data to analyse the impact of food market liberalization on consumption growth, mainly through income and price changes. The third section examines some possible policy interventions to reduce food insecurity for those most at risk and presents an ex ante analysis of the impact of such policies on the at-risk households

Rationale for Early Psychological Intervention Among Disaster Actors in Nairobi County, Kenya

The prevention of long-term psychological distress following traumatic events is a major concern for all. Providing early psychological intervention in disaster management is one of the major attempts in preventing Posttraumatic stress symptoms, which may lead to Posttraumatic Stress Disorder (PTSD). Traumatic events can have a significant impact on individuals’; families and community’s abilities to cope. Intense effect during a traumatic event and its accompanying psychological arousal have been associated with the development of PTSD. The National Disaster Management Policy, 2012 provides an integrated and coordinated disaster Risk management that focuses on preventing the risk of disasters, mitigating their severity, and effective response to disaster recovery. The policy put in place mechanisms to ensure that there is construction and recovery after disaster. However, less emphasis is placed on post-disaster trauma management, counseling services, psychosocial support services, and health services in order to ensure that disaster victims do not suffer from permanent or prolonged disaster-related effects. This study, therefore, sought to evaluate the impact of   early psychological intervention in preventing PTSD among disaster actors.  Research done in the area has shown very little information if any on psychological aspects in disaster management, yet this is the premises of vulnerability.  The specific objective of this study was to assess the rationale for early psychological intervention among disaster actors in Nairobi county, Kenya.  The study was guided by two psychological theories; cognitive behavior theory and constructivist self-development theory. Descriptive and correlational survey designs were adopted in the study, and purposive sampling was used to select the disaster actors that comprised of those who provide rescue services, those who provide first aid and those who provide psychosocial support. Directors and deputy directors were also sampled using the same technique. The simple random technique was used to select 400 disaster actors from various disaster response organizations.Purposive sampling was used to select key informants who included directors and deputy directors of disaster operation organizations. Same sampling technique was used in the selection of FGD participants. Data collection employed qualitative and quantitative techniques i.e., questionnaires, interviews, and Focus group discussions.  Document analysis guides assisted in gathering secondary data. Reliability of the instruments was done by the test-retest method. The data collected was coded and entered into the computer data sheet using the statistical package for social sciences (SPSS) version 23.0. Descriptive and inferential statistics used in data analysis include frequencies, percentages. A SWOT analysis was also used. Results obtained were presented using tables, graphs, and pie charts. The study then came up with findings which will be significant to the disaster operation organizations in preventing PTSD among disaster actors in the aftermath of disasters in Kenya by giving new insights.  The study found out that: the study respondents overwhelmingly favored the need to provide early psychological intervention for disaster management with a percentage of 68 strongly agree and 32 % disagree. SWOT analysis revealed that disaster response organizations were rich with varied strengths and opportunities that were not adequately exploited towards prevention of PTSD among disaster actors. The findings of this study are significant in policymaking and mechanisms pertaining psychological support in recovery after disaster in Kenya emphasis being placed on post-disaster trauma management, counseling and psychosocial support services to ensure that disaster actors do not suffer from permanent or prolonged disaster-related effects. Keywords: Trauma, PTSD, Psychological intervention, Acute stress disorder, disaster actors, SWOT, Vicarious traumatization DOI: 10.7176/JEP/10-36-13 Publication date: December 31st 201

Rationale for Early Psychological Intervention Among Disaster Actors in Nairobi County, Kenya

The prevention of long-term psychological distress following traumatic events is a major concern for all. Providing early psychological intervention in disaster management is one of the major attempts in preventing Posttraumatic stress symptoms, which may lead to Posttraumatic Stress Disorder (PTSD). Traumatic events can have a significant impact on individuals’; families and community’s abilities to cope. Intense effect during a traumatic event and its accompanying psychological arousal have been associated with the development of PTSD. The National Disaster Management Policy, 2012 provides an integrated and coordinated disaster Risk management that focuses on preventing the risk of disasters, mitigating their severity, and effective response to disaster recovery. The policy put in place mechanisms to ensure that there is construction and recovery after disaster. However, less emphasis is placed on post-disaster trauma management, counseling services, psychosocial support services, and health services in order to ensure that disaster victims do not suffer from permanent or prolonged disaster-related effects. This study, therefore, sought to evaluate the impact of   early psychological intervention in preventing PTSD among disaster actors.  Research done in the area has shown very little information if any on psychological aspects in disaster management, yet this is the premises of vulnerability.  The specific objective of this study was to assess the rationale for early psychological intervention among disaster actors in Nairobi county, Kenya.  The study was guided by two psychological theories; cognitive behavior theory and constructivist self-development theory. Descriptive and correlational survey designs were adopted in the study, and purposive sampling was used to select the disaster actors that comprised of those who provide rescue services, those who provide first aid and those who provide psychosocial support. Directors and deputy directors were also sampled using the same technique. The simple random technique was used to select 400 disaster actors from various disaster response organizations.Purposive sampling was used to select key informants who included directors and deputy directors of disaster operation organizations. Same sampling technique was used in the selection of FGD participants. Data collection employed qualitative and quantitative techniques i.e., questionnaires, interviews, and Focus group discussions.  Document analysis guides assisted in gathering secondary data. Reliability of the instruments was done by the test-retest method. The data collected was coded and entered into the computer data sheet using the statistical package for social sciences (SPSS) version 23.0. Descriptive and inferential statistics used in data analysis include frequencies, percentages. A SWOT analysis was also used. Results obtained were presented using tables, graphs, and pie charts. The study then came up with findings which will be significant to the disaster operation organizations in preventing PTSD among disaster actors in the aftermath of disasters in Kenya by giving new insights.  The study found out that: the study respondents overwhelmingly favored the need to provide early psychological intervention for disaster management with a percentage of 68 strongly agree and 32 % disagree. SWOT analysis revealed that disaster response organizations were rich with varied strengths and opportunities that were not adequately exploited towards prevention of PTSD among disaster actors. The findings of this study are significant in policymaking and mechanisms pertaining psychological support in recovery after disaster in Kenya emphasis being placed on post-disaster trauma management, counseling and psychosocial support services to ensure that disaster actors do not suffer from permanent or prolonged disaster-related effects. Keywords: Trauma, PTSD, Psychological intervention, Acute stress disorder, disaster actors, SWOT, Vicarious traumatization DOI: 10.7176/JEP/10-32-08 Publication date: November 30th 201

Economic growth and poverty traps in sub-Saharan Africa: The role of education and TFP shocks

SFX Get it!(opens in a new window)|Entitled full text(opens in a new window)|View at Publisher| Export | Download | More... Research in Economics Volume 67, Issue 3, September 2013, Pages 226-242 Economic growth and poverty traps in sub-Saharan Africa: The role of education and TFP shocks (Article) Cazzavillan, G.a , Donadelli, M.b , Persha, L.c a Department of Economics, Ca' Foscari University of Venice, Venice, Italy b Department of Economics and Finance, LUISS Guido Carli, Viale Romania 32, 00197 Rome, Italy c Department of Geography, University of North Carolina at Chapel Hill, NC, United States View references (37) Abstract This paper investigates the ". education-total factor productivity trade-off" in explaining income per worker differences between sub-Saharan (unlucky) and G7 (lucky) economies. First, we examine the dynamics of average years of schooling (i.e. education), capital per worker, income per worker, and total factor productivity (TFP) across sub-Saharan and G7 countries. We confirm that physical capital and education levels partially explain income per worker differences between lucky and unlucky economies. Second, we undertake a novel examination of the impact of technology shocks on income per worker, with the goal of understanding the role of technology variation in causing cross-country income per worker differences, and as a potential contributor to overall slow growth in the sub-Saharan region. In a vector autoregressive (VAR) framework, we show that the impact of ". ad hoc" TFP shocks on income per worker is larger in unlucky economies than in lucky ones. We observe that average TFP volatility in the "unlucky world" is eight times higher than in the "G7 world". We argue that the order of magnitude of the impact heavily depends on the level of the TFP volatility. Last, we suggest that the documented differences in the amount of physical capital and in the productivity of human capital between these two regions add conceptual support for the existence of poverty traps for sub-Saharan Africa

Sociocultural paradoxes and issues in e-learning use in higher education Africa

Sociocultural issues are major contributing factors in mass acceptance and effective use of technology. These issues are often perceived to contradict the benefits the technology brings about. E-learning use in higher education in Africa, as a technology, faces some sociocultural barriers that contradict its promise and benefits. This paper identifies five social cultural paradoxes, namely globalisation, cultural identity, westernisation, authenticity and foreign ideologies, with the aim of creating awareness of, and eliciting the interventions required to improve the acceptance and use of e-learning. The paper presents the differing and contradictory views of technology advocates and technology sceptics on the use of e-learning in higher in Africa