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- Convenors:
-
Asad Ghalib
(Liverpool Hope University)
Fariya Hashmat (Lahore School of Economics)
Syeda Ayesha Subhani (Lahore School of Economics. Kashf Foundation)
Ahmad Nawaz (Lahore School of Economics)
Rukhsana Kausar (University of Westminster)
Issam Malki (University of Westminster)
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- Formats:
- Papers Mixed
- Stream:
- Business, finance and digital technologies
- Sessions:
- Tuesday 29 June, -
Time zone: Europe/London
Short Abstract:
Amidst longstanding debates on the pros and cons of microfinance as a tool for poverty reduction and empowerment, the pandemic has had a profound effect on MF institutions in developing countries. This panel evaluates the socio-economic impact that the pandemic has had on MFIs and beneficiaries.
Long Abstract:
The outbreak of the pandemic, however, resulted in a significant effect on microfinance institutions and their beneficiaries all across the world. Research has shown that more than two-thirds of the borrowers have had their livelihoods to be either completely shut down or severely impacted in one form or other by the pandemic.
Given the significant impact that COVID19 is producing, this panel invites empirical contributions that focus on aspects such as:
- How are beneficiaries impacted across various social and economic dimensions? We will be looking forward to contributions that capture short and long-term impact across both rural and urban areas.
- How do microfinance institutions respond to the pandemic? What sort of safety mechanisms do they put in place for their clients, if any? Were these sufficient and sustained? We welcome perspectives from practitioners and academics.
- A number of state-led initiatives across the world offer safety nets through cash and non-cash transfer programmes. We welcome contributions that carry out empirical assessments of how, and to what extent such interventions aid borrowers in sustaining their microenterprises.
- To what extent has the pandemic introduced new forms of governance and new political regimes in the management of microfinance?
We welcome contributions that look critically at the role of the various MFIs across the globe.
Accepted papers:
Session 1 Tuesday 29 June, 2021, -Paper short abstract:
We report on concurrent impact evaluation of a women’s economic empowerment programme in rural Ghana that combines training with group-based microfinance. A mid-term QuIP study highlighted women’s preoccupation with raising farm incomes, increasing savings and reducing reliance on credit.
Paper long abstract:
This paper investigates Opportunity International’s ongoing programme “Roots of Change: Increasing the economic empowerment of women in Ghana and the DRC through rural financing”. This combines financial literacy and agricultural training with the offer of savings and loans products. Commitment savings to qualify for a loan are expected to lead towards voluntary savings and increased resilience through a business or farming investment generating an increased income. In the frame of a mid-term evaluation conducted in the summer of 2020 in a COVID-19 affected context, we investigated this causal pathway, and the role formal and informal forms of savings play for the intended beneficiaries in pursuing this strategy in the face of Covid-19 induced and other shocks. Respondents reported experiencing two main changes: an ability to save more and to borrow less, relying on both formal and informal mechanisms. Saving more resulted from increased income and membership of saving groups. It had lasting effects, for example enabling them to make business investments and pay for school fees. Borrowing less, in contrast, was not universally perceived to be a positive outcome. For some, it was a consequence of increased income, and associated increased self-esteem from being more self-reliant; but for others, it arose from an inability to repay loans, and associated with reduced resilience to shocks. The paper also reflects on use of the QuIP methodology to elicit self-reported narratives of change, and shares plans for further research on the complex interactions between financial services, training and exogenous shocks.
Paper short abstract:
This paper assesses the impact of COVID on borrowers’ livelihoods across the country. It focuses on household-level data collected from rural Punjab in Pakistan and offers policy-related implications and avenues for further research.
Paper long abstract:
Poor households in urban and, in particular, rural areas in many developing countries do not have easy access to basic financial services. Their “systematic exclusion” from formal financial services has led to the evolution of an alternative mode of finance, microfinance, in which financial services are provided not through traditional routes, such as local moneylenders, cooperatives and banks, but through NGOs or microfinance institutions (MFIs).
The COVID-19 pandemic brought untold misery to millions around the world. For those who were already struggling to make ends meet, this was a particularly bad time. This study was conducted to assess the impact of the outbreak, and how the ensuing lockdown resulted in the loss of income for micro-entrepreneurs in rural areas.
The study makes use of cross-sectional data that was collected earlier this year by interviewing around 300 borrower households in the rural areas of the Punjab province of Pakistan. Household characteristics were captured across four dimensions, further segregated into various indicators designed to capture various socio-economic characteristics, such as household income and expenditure, household assets and general living conditions. Findings reveal the true multidimensional nature of poverty and how the pandemic resulted in deepening poverty and widening the gap between the rich and poor, thus leading to even more inequality, in addition to leading to a whole range of socio-economic crises across the affected areas. The paper provides important public policy-related implications and avenues for further research.
Paper short abstract:
In this study, we assess the effectiveness of the various social protection measures that a number of state and non-state actors took in order to mitigate the impact of the pandemic on microfinance borrowers.
Paper long abstract:
The exclusion of the poor from formal financial services has led to the evolution of an alternative mode of finance, microfinance, in which financial services are provided through non-traditional routes, such as microfinance institutions.
The COVID-19 pandemic brought untold misery to millions around the world. For those who were already struggling to make ends meet, this was a particularly bad time. Consequently, the Federal and Provincial governments reacted by rolling out a series of measures that offered social safety nets to the deserving poor. They offered cash disbursements of fixed sums and non-cash items such as food packages were distributed. The social protection measures were meant to protect and support those who had lost livelihoods as a consequence of the pandemic.
This study was conducted to assess if, how and to what extent the ensuing social protection measures taken by the state helped to mitigate the loss of earning of the rural poor. It also assesses how the various microfinance institutions responded by offering services of relief packages to their borrowers, as the outbreak resulted in the loss of income for micro-entrepreneurs in rural areas.
Paper short abstract:
This paper draws attention to the impact of microcredit on the relatively less explored non-income dimensions of microfinance client's namely their multidimentional poverty and pro-social behaviors and values. We find that microcredit enhances client's wellbeing and pro-social values and behaviors.
Paper long abstract:
microcredit has played a crucial role in improving the lives of poor. Microcredit impact on client's outcomes such as household’s income, assets, health, education and living standard are widely know but relarively less empirical evidence exists about its impact on the non-income dimentions of the wellbeing.This paper fills in this gap. Employing quasi-experimental design, it evaluates the impact of the microcredit program on the subjective and psychological wellbeing of the clients and on their prosocial values and behaviors through comparions among the treatment and conteol groups of borrowers of Akhuwat microfinance organization, a largest microfinance provider in Pakistan. The sample size consists of total 260 borrowers out of which 130 initial clients (i.e. borrowers who have just joined) are conteol group and the other 130 mature borrowers (who are clients since more than three years) comprised of treatment group. Our findings suggest that microcredit intervention has a positive and significant impact on several of the non-income outcomes. Mature clients experience a higher sense of achievement from their business activity as compared to the initial clients. In the dimension of pro-social behavior and perception, the evidence shows that the role of clients is significant in the aspects of financial help to relatives, financial help to neighbors and importance of girls’ education. This reveals that mature clients tend to engage more in the provision of pro-social activities. Further, client's increase in income due to microfinance increases their work satisfaction, external and internal competence.