La conciencia pública sobre la inequidad global ha sido elevada por grupos indignados de ciudadanos, periodistas, políticos, organizaciones internacionales, yestrellas del pop. Los diarios informan regularmente sobre las tendencias de las tasas de pobreza en todo el mundo y sobre campañas globales dirigidas a reducir esas tasas a la mitad. Un ingreso diario de menos de dos dólares por persona se ha convertido en un indicador ampliamente reconocido para definir a los pobres del mundo. El Banco Mundial cuantificó 2,700 millones de personas en esta categoría en 2001 – dos quintas partes de la humanidad. Entre estos 2,700 millones de seres, los 1,100 millones más pobres a duras penas sobrevivían con menos de un dólar al día.

Para quienes no tenemos que hacerlo, es difícil imaginar cómo es vivir con un ingreso tan pequeño. Ni siquiera tratamos de imaginarlo. Suponemos que con ingresos en estos niveles tan imposiblemente bajos, es muy poco lo que los pobres pueden hacer por sí mismos más allá de sobrevivir de manera precaria. Sus posibilidades de salir de la pobreza deben depender, asumimos, ya sea de la caridad internacional o de su eventual incorporación a la economía globalizada. Los debates públicos más acalorados sobre la pobreza en el mundo, por lo tanto, son aquellos sobre los flujos de ayuda y la condonación de la deuda, y sobre las virtudes y los vicios de la globalización. La discusión sobre lo que los pobres pueden hacer por ellos mismos se oye con menos frecuencia. Si es difícil imaginar cómo sobreviviría uno con uno o dos dólares al día, es aun más difícil imaginar cómo se podría prosperar.

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.

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Microcredit markets in many regions are becoming more competitive. This is generally a good thing for borrowers.

These two commonly heard statements raise a number of questions for policy makers: How to measure the intensity of competition over time? And is competition among lenders always a good thing for borrowers? Or do credit markets, and microcredit markets in particular, have any special features which may change or modify the conventional view of competition? If so, what tools do regulators have to promote competition? The FAI Focus Note “Competition Policy in Microcredit Markets” provides some initial answers to these questions for policy makers who wish an introduction to the issue. To do this, the Focus Note combines general competition theory and policy with evidence from credit markets and microcredit in particular. Since competition involves winners and losers, the regulator’s dilemma here is identifying and making the tradeoffs necessary to find a level of competition appropriate to the stage of market development and in line with national objectives.

Expanding access to commercial credit is a key ingredient of development strategies worldwide. There is less consensus on the role of consumer credit, particularly when extended at high interest rates. Popular skepticism about “unproductive” and “usurious” lending is fueled by academic work highlighting behavioral biases that induce overborrowing. We estimate the impacts of expanding access to consumer credit at 200% APR using a field experiment and follow-up survey and administrative data. The randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes. There is also some evidence that the marginal loans were profitable.

Evaluates the presence of market imperfections such as free-riding in group-based mechanisms.

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La primera estimación global de su clase revela que 2.5 mil millones de adultos no utilizan los servicios financieros formales para ahorrar o para pedir prestado. ¿Quién son estas poblaciones que no tienen servicios financieros? ¿Dónde viven? ¿Cómo sobreviven? ¿Y qué lecciones estas estimaciones llevan a cabo para los legisladores que trabajan para mejorar niveles de inclusión financiera para las poblaciones pobres?

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.

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The authors describe important trade-offs that microfinance practitioners, donors, and regulators navigate. Drawing evidence from large, global surveys of microfinance institutions, they find a basic tension between meeting social goals and maximizing financial performance.  Potential trade-offs therefore arise when selecting contracting mechanisms, level of commercialization, rigor of regulation, and the extent of competition. Meaningful interventions in microfinance will require making deliberate choices – and thus embracing and weighing tradeoffs carefully.

Presents the results of a field experiment and follow-up survey to measure impacts of a credit expansion for microentrepreneurs in Manila.

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