Presents the results of a field experiment and follow-up survey to measure impacts of a credit expansion for microentrepreneurs in Manila.
Access the full paper here.
Type:
Brief
Date:
July 2009
Authors:
Dean Karlan, Jonathan Zinman
Country:
Philippines
Research Areas:
Measuring Impact
Themes:
Big Picture, Credit
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Type:
Brief
Date:
June 2010
Authors:
Financial Access Initiative
Country:
Bangladesh
Research Areas:
Reimagining Financial Access
Themes:
Big Picture, Credit, Product Design
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How do the world's poorest households manage their financial lives on $1 and $2 a day? The authors of Portfolios of the Poor tracked the earning, borrowing, saving, and saving practices of 250 households in Bangladesh, India, and South Africa. The resulting "financial diaries" reflect a mixed-research methodology that is systematic in data collection, and simultaneously captures the complexity of people's lives. This brief takes a closer look at the research samples from all three countries.
This is the ninth note in the Portfolios of the Poor Briefing Notes series. You can link to the other notes below.
Briefing Note 1: The "Triple-Whammy" of Poverty Briefing Note 2: Borrowing to Save Briefing Note 3: How do the Poor Deal with Risk? Briefing Note 4: Research Methodologies Briefing Note 5: Creating Better Portfolios—Core Financial Products for the Poor Briefing Note 6: Portfolios of Bangladesh’s Poor Briefing Note 7: Grameen II and Portfolios of the Poor Briefing Note 8: Understanding Price
These Briefing Notes were created as part of a toolkit of instructional resources for FAI and MicroSave’s June 8-9 virtual conference Reimagining Microfinance Around the World: Implementing Lessons from Portfolios of the Poor. Co-authors Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven, and MicroSave’s Graham A.N. Wright moderated the event and discussed with conference “attendees” how to turn lessons from the financial diaries into real, on-the-ground solutions for economic development. The collection of suggested readings and videos for the conference can be accessed on this page.
Type:
Brief
Date:
June 2010
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Research Areas:
Reimagining Financial Access
Themes:
Big Picture, Credit, Savings
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The financial diaries provide insight into the prices poor households paid for financial instruments, and the logic behind their financial decisions. Researchers revealed that surviving on small, irregular, and unpredictable earnings often generates financial behaviors that at first seem counter-intuitive—such as paying or borrowing to save. Through the financial diaries approach, researchers were forced to confront assumptions and take a fresh look at understanding the price of microfinance—paying close attention to what price means to poor households, the cost financial institutions assume in lending to the poor, and the universal tension between the impatience to meet financial demands today, and the desire to save for the future. This brief outlines these dilemmas and tradeoffs.
This is the eighth note in the Portfolios of the Poor Briefing Notes series. You can link to the other notes below.
Briefing Note 1: The "Triple-Whammy" of Poverty Briefing Note 2: Borrowing to Save Briefing Note 3: How do the Poor Deal with Risk? Briefing Note 4: Research Methodologies Briefing Note 5: Creating Better Portfolios—Core Financial Products for the Poor Briefing Note 6: Portfolios of Bangladesh’s Poor Briefing Note 7: Grameen II and Portfolios of the Poor Briefing Note 9: Three-Country Analysis
These Briefing Notes were created as part of a toolkit of instructional resources for FAI and MicroSave’s June 8-9 virtual conference Reimagining Microfinance Around the World: Implementing Lessons from Portfolios of the Poor. Co-authors Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven, and MicroSave’s Graham A.N. Wright moderated the event and discussed with conference “attendees” how to turn lessons from the financial diaries into real, on-the-ground solutions for economic development. The collection of suggested readings and videos for the conference can be accessed on this page.
Type:
Brief
Date:
June 2010
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Themes:
Big Picture, Credit, Research Methodology
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Type:
Brief
Date:
May 2010
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Themes:
Behavioral Economics, Credit, Savings
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Type:
Brief
Date:
May 2010
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Research Areas:
Reimagining Financial Access
Themes:
Big Picture, Consumer Protection, Product Design
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This Briefing Note offers insight into the ways poor households manage risks. Based on the financial diaries research in Portfolios of the Poor: How the World’s Poor Live on $2 a Day, this brief describes the formal and informal risk management tools used by poor households in Bangladesh, India, and South Africa, and examines how these tools can be improved to help the poor mitigate risk and plan for the future. The note also features new mechanisms for helping poor households deal with risk, including partial coverage, product design, and insurance.
This is the third note in the Portfolios of the Poor Briefing Notes series. You can link to the other notes below.
Briefing Note 1: The "Triple-Whammy" of Poverty Briefing Note 2: Borrowing to Save Briefing Note 4: Research Methodologies Briefing Note 5: Creating Better Portfolios—Core Financial Products for the Poor Briefing Note 6: Portfolios of Bangladesh’s Poor Briefing Note 7: Grameen II and Portfolios of the Poor Briefing Note 8: Understanding Price Briefing Note 9: Three-Country Analysis
These Briefing Notes were created as part of a toolkit of instructional resources for FAI and MicroSave’s June 8-9 virtual conference Reimagining Microfinance Around the World: Implementing Lessons from Portfolios of the Poor. Co-authors Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven, and MicroSave’s Graham A.N. Wright moderated the event and discussed with conference “attendees” how to turn lessons from the financial diaries into real, on-the-ground solutions for economic development. The collection of suggested readings and videos for the conference can be accessed on this page.
Type:
Brief
Date:
May 2010
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Research Areas:
Mechanisms Matter
Themes:
Insurance, Product Design, Research Methodology, Savings
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Portfolios of the Poor offers new thinking about how the world’s poorest communities manage their financial lives. To uncover these intimate details, researchers designed a study in which they interviewed poor households twice a month over the course of a year, and recorded the details of how they managed their financial lives. The resulting “financial diaries” encompass data from nearly 250 households in Bangladesh, India, and South Africa, and reflect a mixed-research methodology that is systematic in data collection while simultaneously captures the complexity of people’s lives.
This note explores the following research methodologies adopted during the book’s research: • The financial diaries approach • Interviews • Demographics of the survey sample • The continuum of household research: Where do the financial diaries fall? • Lessons learnt from portfolio approach
This is the fourth note in the Portfolios of the Poor Briefing Notes series. You can link to the other notes below.
Briefing Note 1: The "Triple-Whammy" of Poverty Briefing Note 2: Borrowing to Save Briefing Note 3: How do the Poor Deal with Risk? Briefing Note 5: Creating Better Portfolios—Core Financial Products for the Poor Briefing Note 6: Portfolios of Bangladesh’s Poor Briefing Note 7: Grameen II and Portfolios of the Poor Briefing Note 8: Understanding Price Briefing Note 9: Three-Country Analysis
These Briefing Notes were created as part of a toolkit of instructional resources for FAI and MicroSave’s June 8-9 virtual conference Reimagining Microfinance Around the World: Implementing Lessons from Portfolios of the Poor. Co-authors Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven, and MicroSave’s Graham A.N. Wright moderated the event and discussed with conference “attendees” how to turn lessons from the financial diaries into real, on-the-ground solutions for economic development. The collection of suggested readings and videos for the conference can be accessed on this page.
Type:
Brief
Date:
May 2010
Country:
Bangladesh; India; South Africa
Research Areas:
Reimagining Financial Access
Themes:
Research Methodology
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Type:
Brief
Date:
May 2010
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Research Areas:
Reimagining Financial Access
Themes:
Credit, Product Design, Research Methodology
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Describes finding from an experiment in rural India that suggest that the structure of microcredit loan contracts can help people with self-discipline problems who lack suitable savings products.
Access the full paper here.
Type:
Brief
Date:
December 2009
Authors:
Michal Bauer, Julie Chytilová, Jonathan Morduch
Country:
India
Research Areas:
Reimagining Financial Access
Themes:
Behavioral Economics
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Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts benefit borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse. Evaluates the presence of market imperfections such as free-riding in group-based mechanisms. Access the full paper here.
Type:
Brief
Date:
November 2009
Authors:
Xavier Giné, Pamela Jakiela, Dean Karlan, Jonathan Morduch
Country:
Peru
Research Areas:
Mechanisms Matter
Themes:
Product Design
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Using two new datasets, the authors examine whether the presence of banks affects the profitability and outreach of microfinance institutions. They find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks relying on commercial-funding and using traditional bilateral lending contracts (rather than group lending methods favored by microfinance NGOs). The authors consider plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment, but fail to find strong support for these alternative hypotheses.
Access the full paper here.
Type:
Brief
Date:
September 2009
Authors:
Robert Cull, Asli Demirgüç-Kunt, Jonathan Morduch
Country:
Global
Research Areas:
Investment and Regulation
Themes:
Big Picture, Commercialization & Subsidy
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Drawing on financial diaries research outlined in Portfolios of the Poor: How the World’s Poor Live on $2 a Day, this brief looks at ways to envision the next generation of services for the "bottom billion” by examining what is and isn’t working for poor households as they patch together their financial lives.
Type:
Brief
Date:
July 2009
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Research Areas:
Reimagining Financial Access
Themes:
Consumer Protection, Credit, Product Design, Savings
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This brief offers insight into the ways poor households manage risks. Based on the financial diaries research outlined in Portfolios of the Poor: How the World’s Poor Live on $2 a Day, this brief outlines the formal and informal risk management tools used by poor households in Bangladesh, India and South Africa, such as insurance and savings, and examines how these tools can be improved to help the poor mitigate risk and plan for the future.
Type:
Brief
Date:
July 2009
Authors:
Financial Access Initiative
Country:
Bangladesh; India; South Africa
Research Areas:
Mechanisms Matter
Themes:
Insurance, Product Design
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A review of recent innovations that are improving the quantity and quality of financial access. Authors relate the innovations and empirical evidence to theoretical ideas, drawing links in particular to new work in behavioral economics and to randomized evaluation methods.
Access the full paper here.
Type:
Brief
Date:
June 2009
Authors:
Dean Karlan, Jonathan Morduch
Research Areas:
Reimagining Financial Access
Themes:
Big Picture, Insurance, Research Methodology, Savings
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This paper explores the implications of voluntary reporting on knowledge of microfinance, using specific data from the MixMarket and the Microcredit Summit. The authors find that while both organizations aspire to provide a broad, global set of data, different trends in the reported data influence our analyses and lead to different conclusions depending on the dataset used.
Access the full paper here.
Type:
Brief
Date:
June 2009
Authors:
Jonathan Bauchet, Jonathan Morduch
Country:
Global
Research Areas:
Investment and Regulation
Themes:
Big Picture
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Replication of seminal studies on the impact of microfinance.
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Type:
Brief
Date:
June 2009
Authors:
Jonathan Morduch, David Roodman
Country:
Bangladesh
Research Areas:
Measuring Impact
Themes:
Credit
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Uses data from SafeSave, a credit cooperative in the slums of Dhaka, Bangladesh, to examine how sensitive borrowers are to increases in the interest rate on loans.
Access the full paper here.
Type:
Brief
Date:
May 2009
Authors:
Rajeev Dehejia, Heather Montgomery, Jonathan Morduch
Country:
Bangladesh
Research Areas:
Mechanisms Matter
Themes:
Interest Rates
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Group liability in microcredit purports to improve repayment rates through peer screening, monitoring, and enforcement. However, it may create excessive pressure, and discourage reliable clients from borrowing. Two randomized trials tested the overall effect, as well as specific mechanisms. The first removed group liability from pre-existing groups and the second randomly assigned villages to either group or individual liability loans. In both, groups still held weekly meetings. We find no increase in default and larger groups after three years in pre-existing areas, and no change in default but fewer groups created after two years in the expansion areas.
Access the full paper here.
Type:
Brief
Date:
May 2009
Authors:
Xavier Giné, Dean Karlan
Country:
Philippines
Research Areas:
Mechanisms Matter
Themes:
Credit, Product Design
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Examines the mechanics, merits and limitations of randomized experiments in microfinance.
Type:
Brief
Date:
May 2009
Authors:
Jonathan Bauchet, Aparna Dalal
Country:
Global
Research Areas:
Measuring Impact
Themes:
Research Methodology
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