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- Convenors:
-
Paulina Simkin
(University of Augsburg)
Tamar Jugheli (University of Groningen)
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- Theme:
- ECO
- Location:
- Posvar 5702
Accepted papers
Session 1Paper long abstract
Microfinance Institutions (MFIs) offer banking services to poor customers who have no access to the traditional financial sector. Recently, developments in the microfinance industry have increased focus on financial sustainability and efficiency of MFIs therefore shifting focus from their social mission (outreach). Previous studies that examine the factors affecting both financial sustainability and outreach of MFIs consider these two challenges for MFI without taking into account the possible link between them. On this basis we propose a model which views both 'outreach' and 'financial sustainability' as being endogenous. We also explore the impact of regulation on MFI's performance. Our results show that focusing on financial sustainability does not necessarily hurt the depth and breadth of outreach. As for the effect of regulation on MFIs performance, our results show that regulation might improve the financial performance of MFIs while decreasing its outreach. Additionally, following questions are of primary interest when evaluating the impact of regulation: (1) what is the effect of regulation on performance of actually regulated MFI? and (2) what is the effect of regulation on performance of MFIs that opt for regulation once they start taking deposits? In a new contribution to existing literature, our results show that the impacts of regulation on performance of actually regulated MFIs and MFIs that opt for regulation once they start taking deposits are different from the effect of regulation on randomly chosen MFI. For regulated MFIs the impact of regulation on financial performance is negative and is positive for those MFIs which become regulated once they start accepting deposits from clients. Thus, any policy with the intent of keeping MFIs regulated to improve their financial performance is perhaps questionable while any intervention with the intent of making MFIs regulated once they start accepting deposits from clients is financially feasible.
Paper long abstract
Will China's Belt and Road Initiative (BRI) and the Eurasian Economic Union (EAEU) promoted by Russia - two ambitious integration projects - help boost regional integration in Central Asia? The region has been for many years characterized as largely disintegrated. It is thus a puzzling research question whether these two grand external initiatives will unlock region's potential for integration or whether highly disintegrated Central Asia will become a stumbling block for their successful implementation. The paper addresses these research questions from the perspective of Central Asian countries. It analyses the present state of Central Asia-China and Central Asia-Russia relations in light of China's BRI and Russia's Eurasian Economic Union projects. The paper also discusses a potential merge of the EAEU with China's BRI where Central Asia would be at the core of the process. China seeks to obtain access to the Eurasian common market for further economic expansion and the promotion of BRI. Its involvement through the Silk Road project may prove a game changer not only for Central Asia but also for the EAEU. The main conclusion is that for Beijing promoting regional integration and joining efforts with the EAEU are not the ultimate goal per se, but rather a pragmatic opportunity to achieve its more ambitious objective of boosting trade with Western Europe. The paper draws on secondary data as well as primary sources in the form of 38 interviews carried out with experts in Central Asia in 2017-2018. The experts assess the prospects for China's regional expansion and the development of the EAEU. Their perceptions and views will be systematically analyzed and presented in the paper.