Microcredit in Brazil and its Limitations as a Core Poverty Alleviation Tool

Size: px
Start display at page:

Download "Microcredit in Brazil and its Limitations as a Core Poverty Alleviation Tool"

Transcription

1 Microcredit in Brazil and its Limitations as a Core Poverty Alleviation Tool Maloe Bosch # Supervisor: Naomi Leefmans July 2010

2 1 Index: 1. Introduction Microfinance, banking the unbanked Microfinance in Brazil.6 4. Limitations of microcredit in poverty reduction The ability to reach the core poor Outreach in Brazil The impact in reducing poverty Impact of Microfinance in Brazil The cost-effectiveness in comparison with other types of aid The cost-effectiveness in Brazil Future challenges of microcredit in Brazil Conclusion Bibliography...30

3 2 1. Introduction In 2005, the United Nations proclaimed the year of microcredit. The following year, microcredit gained further attention when Yunus and Grameen Bank won the Nobel Peace Prize for their occupation with microfinance for their efforts to create economic and social development from below (Norwegian Nobel Committee Website, 2008). Since then, microfinance has gained a lot of popularity and is generally seen as a tool to empower the poor, fight poverty and change the economic structures that exclude low-income households. According to Microfinance at a Glance, an overview report by the Microfinance Information Exchange (MIX) 1, the worldwide microcredit portfolio is U$ billion (MIX Website, 2010). The enthusiasm of aid donors and policymakers, the amount of funds involved and the seeming success raise the question to what extent microcredit can help the most needy, the ones living in extreme poverty. Microfinance has shown to be an empowering tool for the low income class in general, but it must also keep in mind its objective to serve the most excluded. As the microfinance market expands commercial banks are starting to enter as well and commercial funds are becoming a more important source of capital. With these new developments, the focus on the very poor seems even less evident. A country with great microfinance potential is Brazil. It has a great economy with a GDP of trillion US$ and an incredibly large population more than 191 million people (UNdata ). It has a large amount of poverty, constituting a large potential demand for microcredit. Yet, the total amount involved in microfinance in Brazil is remarkably small compared to other Latin American countries with a population and Gross Domestic Product many times inferior. Apparently, microfinance as poverty reduction method has not yet penetrated Brazil like it has penetrated many other developing countries in Latin America, even though the sector is certainly growing nowadays. This paper aims to study the current state of microfinance in Brazil and how the general limitations of microfinance affect microfinance s potential for core poverty alleviation in Brazil. After considering the main problems of microfinance in 1 The Microfinance Information Exchange (MIX) is an information provider dedicated to strengthening the microfinance sector. The organization s core focus is to provide objective data and analysis on microfinance providers. In doing so, MIX promotes financial transparency in the industry and helps build the information infrastructure in developing countries. Source: Website MIX

4 3 reducing core poverty it will investigate whether these limitations hold for the current Brazilian situation specifically. Firstly, this paper will introduce microfinance and how it aims to bank the unbanked. Secondly, an overview of the evolution of microfinance in Brazil is given. Then it will consider the strengths and limitations of microfinance according to three criteria; the ability to reach the core poor, the eventual impact in reducing poverty and the cost-effectiveness. The three criteria are used in many poverty impact studies (Montgomery & Weiss, 2005, p. 392) since all three criteria are important in deciding whether a poverty policy is desirable. For every criterion the Brazilian situation will be evaluated. Fourthly, future challenges will be discussed. The last section is the concluding section. Available literature and research on microfinance is used. Most data come from the Microfinance Information Exchange (MIX) and the Consultative Group to Assist the Poorest (CGAP). 2. Microfinance, banking the unbanked Throughout this paper microcredit is defined as small loans offered to people of low-income levels without access to conventional credit of regular banks. Microfinance is defined as a broader package of financial services including not only microcredit but other financial services such as saving accounts, insurance services and money transfers as well. The idea is that microcredit enables the poor to lift themselves out of poverty by financing productive activities (Montgomery & Weiss, 2005, p. 395). This can either mean starting or expanding a small business. The microcredit can be invested in any sector as long as the investment attributes to productive activities. Microcredit s methodology is different from that of regular banks in various ways. It targets people with a low-income level who are typically household-based entrepreneurs and self-employed, mostly working in the informal sector. They lack access to regular credit at conventional banks, which generally do not offer small loans and work with requirements these entrepreneurs cannot meet. At microfinance institutions (MFIs), on the other hand, clients start with very small loans. Median loan sizes run from US$ 99 in South Asia till US$1,254 in Eastern Europe and Central Asia (Gonzalez, p.24, 2008). After successfully repaying the first loan, one can opt for a new loan of greater value. This way loan size increases along with the successful repayment record of the client, keeping initial risk at a minimum while allowing the

5 4 businesses to grow. Time to maturity is shorter than with commercial credit and the repayments are more frequent, usually weekly or biweekly (Westley, 2007, p.6). Risk assessments are made on the basis of the cash flow analysis of the household as a whole, not just the business. The procedure of application for a loan is simpler and less formal documentation is needed. Interests on microloans are usually much higher than on regular credit, to compensate for the high operating costs margins on these customized small loans (Westley, 2007, p.5). Probably the main reason why the clients of microcredit lack access to regular banking services is the fact that commercial banks operate with a traditional collateral requirement, a requirement the poor often cannot meet. Most MFIs lend without collateral or accept nontraditional collateral like household assets. These assets, however, will likely only be registered if the borrower is risking default, since registering and valuing these assets is time-consuming and expensive (Standard & Poor s, 2007, p. 56). In addition to the lack of collateral, traditional credit risk assessments are problematic. Most poor do not have a registered labor record as they work in the informal sector. However, applying for an official loan at a commercial bank often requires an analysis of working history to assess credit worthiness (Standard & Poor s, 2007, p. 55). This creditworthiness assessment is partially passed on to the lenders in the case of group lending. This particular form of small credit is also called solidarity loan. Applying for a group loan clients have to bring together co-lenders whom can be, for example, community members or friends. As a group, which normally consists of three to seven people, they bare a joint liability for the loan (Westley, 2004, p.2). In case of default of one, the other members will have to guarantee the repayment of the defaulting member. In this system of social collateral the informational asymmetries are reduced; community members are much better informed about the financial situation and repayment capacity of a certain person than the bank (Neri, 2008, p. 35). Because of the joint liability group members will now monitor each other and exclude members whom are likely to default. Moreover, due to the peer pressure an increased incentive exists to repay. Another form of microfinance is through community banking, also called village banking. In the case of community banking the group of clients is autonomously responsible for the management of the bookkeeping, distribution and repayment of the funds. The groups consist of ten to thirty individuals which select

6 5 their own leader. They start with a loan from a Community Bank Institution or a Microfinance Institution, but how this fund is distributed among the members is up to the community (Westley, 2004, p. 3). As with group lending, the group bares a joint liability. When a community applies for a loan Community Bank Institutions generally require the members to save a certain percentage of the amount of the loan applied for. This way a collective internal account is created. This serves as collateral, stimulates financial discipline and can be used in case of emergencies once the loan is given out (Westley, 2004, p. 3). Usually the savings requirement remains in force until maturity of the loan. Community Bank Institutions typically target the rural and the poorest population. Initially microfinance focused on lending solely to groups of women. The Grameen Bank, for example, still defines Grameencredit as targeted to the poor, particularly poor women and in order to obtain a loan a borrower must joint a group of borrowers (Grameen Bank Website, 2010). The preference for lending to women is based on the women s multiplier effect; since they are more likely to reinvest their earnings in their households in comparison to men, women have a multiplied poverty reducing effect (Nader, 2008, p. 645). However, many MFIs lend to men as well. The percentage of women borrowers at the MFIs of all regions reporting to MIX in 2009 ranged from 36% for the 25 th percentile till 77% for the 75 th percentile, with 54.43% being the median (Figure 1). Figure 1. The percentages of women borrowers at MFI s from the 25 th till the 75 th percentile, with median midpoint. Source: MIX Market, data for 2009, adjusted. Apparently microfinance in general is no longer solely targeting groups of women. Nor does it focus on group lending or community banking only, since many MFIs offer individual loans today. Sometimes one can apply for an individual loan after successful repayment within a group. Other MFIs simply offer small individual loans directly and accept non-traditional collateral. Requirements to apply for an

7 6 individual loan are stricter. Individual loans are more common among the upper poor and usually are larger than the loan obtained by an individual applying in a group (Westley, 2004, p.1). A global MIX trendline report of the period showed that MFIs offering both group loans and individual credit are becoming more common (Figure 2). Figure 2 Number of MFI s selected by the types of microcredit offered Methodology Individual Individual/Solidarity Solidarity Village Banking Total MFIs: 487 Total MFIs: 487 Total MFIs: 487 Source: MIX Market, Trend Lines MFI s Benchmarks. 3. Microfinance in Brazil Compared to other countries in Latin America, the largest country of the continent, Brazil, has a very limitedly developed microfinance market. The Brazilian microfinance sector only started to grow in the nineties when microfinance already was a common practice in some other Latin American countries. However, Brazil s characteristics would suggest a significant market for microfinance. After Chili, the country has the largest GDP of Latin America. The Gini index, measuring the inequality of the distribution of income in a country, is 0,567 for Brazil 2. This makes it the 10 th most unequal country in the world (CIA World Factbook Website). Yet, the total amount of funds involved in microfinance in Brazil is remarkably small compared to other Latin American countries with a population and Gross Domestic Product many times inferior (Figure 3). Argentina is an exception, with an even smaller Gross Microloan portfolio. Figure 3 Latin America comparisons, data for The Gini index is calculated with the use of the Lorenz curve. The Lorenz curve plots the cumulative income distribution of people arranged from the poorest to the richest. The index is the ratio of the area between a country s Lorenz curve and the 45 helping line to the entire triangular area under the 45 line. (Website CIA World Factbook, seen on ) In the case of perfect equality the Lorenz curve would coincide with the 45 line and the index would be zero. In case of perfect inequality the index would be 1.

8 7 Gross Microloan Porfolio (millions US$) Gross Domestic Product (millions US$) Estimated Population in Gross Loan Portfolio as % of Global Gross Loan Portfolio (rounded) Brazil ,595, ,972, % Mexico ,081, ,556, % Bolivia ,701 9,694, % Peru ,933 28,837, % Ecuador ,572 13,481, % Colombia ,745 45,012, % Nicaragua ,961 5,667, % Argentina ,322 39,883, % Chile ,573 16,804, % World % Source: Gross Loan Portfolio: MIX Market, Gross Domestic Product + Population: UNdata, Although a handful of microcredit initiatives emerged in the states Pernambuco, Bahia, Rio de Janerio and Rio Grande do Sul in the 70 s and 80 s, significant growth in the microfinance sector started only in the late 90 s (Barone, 2008, p. 52; Soares & Sobrinho, 2008, p.133). Until then, two main factors prevented a real growth in the microcredit sector. Firstly, hyperinflation from 1986 to 1994 causing extremely high interbank rates reduced both the demand and the supply of credit (Nichter, 2002, p. 39). The hyperinflation not only resulted in a credit collapse, but lowered purchasing power of consumers, investment rates and slowed down economic growth (Barone, 2008, p.44). In 1994 the Plano Real, a set of measures to stabilize the Brazilian economy, was successfully introduced after various failed attempts to stabilize the economy between 1986 and 1991 (Barone, 2008, p.45). This plan succeeded in lowering inflation rapidly, through a strict monetary policy of an exchange rate anchor within a fairly rigid band (Schonberger, 2001, p. 2). From then on, inflation has been relatively stable, allowing the Brazilian economy to enter a new phase (Figure 4). The reduced inflation also allowed the official interbank rate (Selic) to gradually come down. In comparison with, for example, the Federal Reserve rate, interbank rates from the 80 s till the mid-90 s have been relatively high in Brazil (Neri, 2008, p.13) (Figure 5 and 6). This raised the cost of funds throughout the financial system.

9 8 Figure 4 Inflation History Chart, percentage per year Source: Ipeadata Website, database of Research Institute of Applied Economics - Instituto de Pesquisa Econômica Aplicada. Figure 5 Selic History, monthly averages of Banco Central do Brazil s overnight lending rate, percentages Source: Ipeadata Website, database of Research Institute of Applied Economics - Instituto de Pesquisa Econômica Aplicada. Figure 6 Monthly averages of the Federal Reserve s overnight lending rate, percentages

10 Source: FED Website - A second important factor that prevented growth of the microcredit sector has been the lack of adequate legislation regarding microfinance and many regulatory obstacles that were preventing microcredit to be practiced on a growing scale. Under the new and more favorable macro-economic conditions since 1994 the Central Bank of Brazil started to organize debates and seminars involving the main actors from the microfinance sector (Alves& Soares, 2006, p. 27). Its objective was to find out the main deficiencies in the regulation of microcredit. In the second half of the 90 s this resulted in some policy and regulation changes and a number of important microcredit programs were initiated. One of these new programs was o Programa de Crédito Productivo Popular (Program of Common Productive Credit) of the Banco Nacional de Desenvolvimento Econômico e Social (National Bank for Economic and Social Development), launched in 1996 (SEBRAE Website: Serviço Brasileiro de Apoio às Micro e Pequenas Empresas Brazilian Support Department to Micro and Small Businesses). Another program called CrediAmigo was started in 1998, after a pilot period of a year, by the public development bank Banco do Nordeste (North-East Development Bank) (SEBRAE Website). CrediAmigo is now the second largest microfinance program in Latin America in terms of portfolio size (MIX Publications, Americas: the top 100, 2010). Another example of an attempt to stimulate microfinance in Brazil is a program that was launched in 2001 by SEBRAE, specifically focusing on microcredit (Barone, 2008, p.61). Its objective is to support the microfinance sector and its

11 10 integration in the national financial system, helping it to become self-sustainable (SEBRAE Website). Other efforts to stimulate the microfinance sector included the creation of two new legal entities; OSCIPs (Organização da Sociedade Civil de Interesse Público Civil Public Interest Society Organizations) and SCMs (Sociedades de Crédito ao Microempreendedor Microentrepreneur Credit Societies) (Barone, 2008, p.55). These new types of entities facilitated the practice of microfinance by non-bank organizations such as NGOs. Previously it had been practically impossible for non-bank entities to practice financing activities because of rigid legislation. The first new entity type, an OSCIP, is a non-profit organization serving a social goal and it is monitored by the Ministry of Justice (Kumar, 2005, p.88). Nongovernmental organizations (NGOs) can choose to transform into an OSCIP. It can sign cooperation agreements with the government to help it fulfill its social objective and receive public funds to do so. Other types of funds allowed are limited to donor funds and owner funds (Kumar, 2005, p. 87). One of the great advantages of this type of NGO is the fact that OSCIPs are not subject to the Brazilian Usury Law, legislation prohibiting charging more than twice the official interbank rate per annum for organizations not regulated by the Central Bank (Nichter, 2002, p.36). Since the operating expenses of microcredit institutions tend to be a lot higher than regular banks and so do their interest rates to cover these expenses, this exclusion is crucial to the growth and sustainability of MFIs. The other new entity type, SCM, is a for-profit financial institution. It is regulated by the Central Bank and therefore not subject to the Brazilian Usury Law (Barone, 2008, p.56). It is subject to minimum capital and liquidity requirements and restrictions on leverage (Kumar, 2005, p.88). Besides the OSCIP types of funds, it is also allowed to receive credit from national and international financial institutions. SCMs are permitted to give out loans up to R$ 10,000 per client (US$ 5484) 3 to individuals and microenterprises for professional, industrial and commercial use. Consumer loans are not allowed. They can not offer securities or collect deposits (Kumar, 2005, p.88). The creation of the new programs and these new institutional forms contributed to the spreading of microfinance in Brazil, even though it started 3 Rounded, using exchange rate of R$1.8234=US$1of 1 st of June 2010, Federal Reserve USA Website,

12 11 relatively late compared to other Latin American countries. Because of this late start, Brazilian MFIs are still relatively young. In 2009 the average age of a Brazilian MFI was seven years, whereas the average age for MFI s from Bolivia was seventeen years and fourteen years for both Peru and Nicaragua (Ramírez, 2010, p.8). Another remarkable characteristic of the Brazilian microcredit market is the high concentration of operations in only a few institutions. From a total of 27, the five largest MFIs in terms of clients and portfolio serve 89.2% of all borrowers and hold 89.5% of the Brazilian microcredit portfolio (MIX Publications, 2010, p.1). These largest five are CrediAmigo, Central Cresol Baser, Cresol Central, Banco Popular do Brasil and Real Microcrédito. This high concentration is also reflected in what Neri calls the North-Eastern Mystery (2008, p.14-15). He refers to the data of a research on the informal economy called Ecinf executed by SEBRAE and the Brazilian Institute of Geography and Statistics (IBGE- Instituto Brasileiro de Geografia e Estatística). It shows that the percentage of urban Brazilian microenterprises with a loan did not grow between 1997 and Yet at the same time, the study shows that the use of credit in the North-East, the poorest urban area of Brazil, has grown quicker than in the rest of Brazil. It even has the highest credit use by urban microenterprises of the country (Neri, 2008, p.14). CrediAmigo plays a significant role in this North-Eastern Mystery (Neri, 2008, p.166). This program holds about half of Brazil s microfinance market, making it the biggest of the country (MIX Market, data for 2008). The area of research in the North-East coincides with the area where CrediAmigo operates and given the relevance of CrediAmigo both regionally and nationally, it is hard to deny CrediAmigo s role in improved microcredit access in the North-East of Brazil (Neri, 2008, p.167). The great impact of one single MFI in a region is indicative of how microfinance in Brazil is a sector with few very influential actors. 4. Limitations of microcredit in poverty reduction The effectiveness and desirability of microcredit as a policy to alleviate core poverty will be considered on the basis of its ability to reach the core poor, the final impact on their poverty and the cost-effectiveness or financial sustainability. These three criteria are used in most poverty impact studies since all three criteria are important in deciding whether a poverty policy is desirable (Montgomery & Weiss, 2005, p. 392). If one of these three criteria would be left out, a policy could be able to reach a lot of

13 12 poor and be financially feasible, while its eventual impact on poverty is not significant. On the other hand, an aid policy that has the potential to greatly improve poor households welfare can still overall be an ineffective poverty reducing policy if it can only reach a few households. Finally, without the cost-effectiveness criteria the financial feasibility is not considered. To decide on the desirability and effectiveness of microcredit as a core poverty alleviation tool it is important to consider these criteria together even though in practice these criteria often are inevitable tradeoffs The ability to reach the core poor The ability to reach the poor is called outreach and considers the quantity of people served by microcredit. Even though Microfinance institutions (MFIs) are designed to supply credit to the low-income class, the lowest layer in the wealth pyramid consisting of people living of less than a dollar a day is a very limited beneficiary of microcredit (Montgomery & Weiss, 2005, p. 395). Differences in outreach exist among MFIs and among regions. Asian MFIs do better than Latin-American MFIs in reaching the poorest with the lowest loan and saving balance per borrower (Montgomery & Weiss, 2005, p. 393). Loan size is taken as a proxy for depth of outreach while it is generally assumed that the poorest take out the smallest loans. Their Microfinance Bulletin data from 2003 shows an average loan balance per borrower of US$ 195 for Asia and US$ 581 for Latin America. In this sense outreach is indeed more limited in Latin America than in Asia. Limitations in outreach are related to both problems on the supply and demand side. Problems on the supply side will be considered firstly. One of the main reasons why the supply to the core poor is limited is the relatively high costs in serving the core poor. The poorest generally take out the smallest loans, making the administration and operation costs per loan disproportionately high. Considering that many MFIs aim to be financially sustainable and donor-independent, this cost aspect weights heavily. This focus on financial sustainability can cause the services to the poorest to reduce or even disappear since these are the least profitable or not profitable at all (Lascelles, 2008, p.4). However, beside the fact that small loans are relatively costlier, other reasons exist that limit the outreach to the poor. A lot of the core poor live in rural areas and this contributes to the increased operating cost and risk. Rural loans have higher operating costs, since the operating

14 13 costs are negatively related to the customer density per square kilometer (Shankar, 2007, p.6). In other words, the less people served in an area, the higher the operational costs per loan become. Costs of monitoring and collecting repayments increase in remote areas. Additionally, loans to rural clients have a higher degree of default risk. Participants of rural microcredit programs often take out loans to finance their agricultural or fishing activities. The income gained with these activities can be very seasonally variable (Gaiha, 2001, p. 139). Neri (2008, p.50) states that in order to be sustainable and successful, MFIs should always diversify their portfolio and therefore never solely invest in agricultural areas with one dominant activity. For example, in the case of drought, this could lead to a default of the whole rural portfolio. Furthermore, market access is one of the decisive conditions for the microentrepreneur to improve income with the credit obtained (Neri, 2008, p.51). Getting this market access is generally more complicated in rural areas and selling their products in urban areas is difficult. They would need to travel long distances which is costly and time-consuming due to weak infrastructure. This increases the risk that the rural participants will not be able to produce enough surpluses to make their repayments in time (Bond, 2007, p ). The increased default risk and the lack of portfolio diversification demotivate MFIs to operate in rural areas, in addition to the proportionally high operating costs. Normally, in the case of high default risk a loan would still be possible if it is backed up by collateral. However, living in poverty makes traditional collateral requirements impossible to be met (Montgomery & Weiss, 2005, p. 395). One other way to compensate for the high default risk and lack of collateral is to raise exceptionally high interest rates. However, due to the small loan sizes and the labor intensity of banking the poor, the microfinance interest rates generally are much higher than the regular banking rates already. Raising the interest rates even further would make the microloans unaffordable for the core poor. Besides the supply-side limitations, also demand-side factors contribute to microcredit s limited outreach. The collective set-up of the loans is part of the problem of reaching the real poor (Montgomery & Weiss, 2005, p. 396). The group lending mechanism is designed in such a way that when one member defaults, the rest of the group is responsible for this default. The poorest class is perceived to be bad credit-risk, unable to generate enough extra income to repay. Therefore, the fellowmembers exclude the core poor from group loans out of fear for their default (Bond,

15 , p Hashemi & Rosenberg, 2006, p.2). This way the core poor often have trouble joining group loans. In a review on the Maharashtra Rural Credit Project in India, Gaiha (2001, p. 138) notes that some community members were not allowed to join. Others were pointing to the uncooperative attitude of the village community. Another respondent feared that his efforts to join a credit group might provoke a hostile reaction from village and local authorities (Gaiha, 2001, p. 138). These are examples of how the core poor sometimes exclude themselves from the group lending process. It can be caused by pressure from the community or out of proper fear of not being able to make the repayments. Given their very low and irregular income, they do not consider themselves trustworthy to take out a loan (Hashemi & Rosenberg, 2006, p.2). Moreover, the lack of self-confidence is increased by the fact that most core poor are illiterate, while reading skills are necessary if one wants to sign in and make up a loan-contract (Montgomery & Weiss, 2005, p. 395). Taken in combination, these aspects attribute to the limited outreach of microcredit to the core poor. The relatively high cost of serving the poor, the lack of services offered to rural areas because of high costs and risk and the core poor s selfexclusion or exclusion by the group, all contribute to the low extent in which microcredit reaches the core poor Outreach in Brazil As we have seen in Figure 3, the total amount of funds involved in microfinance in Brazil is still relatively small. Although this relatively young market is serving a growing number of clients, the total amount of 809,112 active borrowers is moderate in comparison with its population of almost 192 million people (data for 2008). The first two lines in figure 8 show once more that Brazil is not leading the continent in microfinance numbers. The third line shows the average loan balance per borrower. This measure measures the typical debt burden for the borrower. It takes the amount of US dollars outstanding at a point in time (usually year-end) divided by the number of loans outstanding at that point of time (Schreiner, 2001, p.10-11) 4. Smaller average 4 This easily computed measure is a commonly used despite one imperfection; it does not take into account the term to maturity. This imperfection allows a loan repaid five weekly installments to have the same average loan balance as a loan repaid in five monthly installments (Schreiner, 2001, p.11). Moreover, if the outstanding stock has a high variability during the year, it can misstate the average

16 15 balances are generally associated with a greater outreach to the poor, since poorer clients typically have a smaller debt burden. Brazil s average loan balance per borrower is significantly smaller than Latin America s average. This suggests that Brazil is reaching poorer clients than the average Latin American MFI. Figure 8: Comparison of Brazilian Microfinance market, data for 2008 Brazil Latin America and Global Caribbean # MFI s ,395 # Active borrowers 809,112 14,100,000 86,200,00 Average Loan ,341 1,588* Balance per Borrower ($) % of population 7.76% 8.22% 25.19% living in households with per capita income of less than US$1.25 a day Source: MIX Website (Brazil overview) and Microfinance at a Glance from MIX Website. * This high average is caused by a high regional average of the region Eastern Europe and Central Asia (US$ 4,008). After this region, Latin America has the highest average loan balance per borrower Source: PovcalNet, World Bank Development Research Group Website, data for Yet, the size of the average loan balance is not necessarily related to its method of providing loans. Instead, it can also be related to the age of the MFIs. According to the MIX Latin American Microfinance Analysis and Benchmarking Report, the average age of a South American MFI is fourteen years (2008, p. 3). However, Brazil s MFIs are far less mature; the average age of a Brazilian MFI is only seven years (MIX: Brazil 2009 Microfinance Benchmarking Analysis and Report, 2010, p. 1). Generally, MFIs that have been operating for a longer period are serving more mature clients. These clients initially started with small loans, but the values of their loans have grown along with their businesses. The average loan balance is affected by the increasing loan value of returning clients and the increasing difficulty to attract new borrowers. Accordingly, the high Latin American average loan balance can partially be explained by the long period of functioning of MFIs and balance. In this case it is better to divide the annual average of Dollars outstanding by the annual average of loans outstanding (Schreiner, 20021, p.11).

17 16 does not necessarily show a lack of services offered to core poor. Nor does it indicate that Brazil is extremely dedicated in serving the poorest. (Benchmarking Latin America 2006, MIX, p.4). In the case of Brazil, the lower average loan balance is probably related to the low level of the microfinance market saturation. Thus, Brazil s average loan value being smaller than Latin America s average seems to indicate that Brazil is doing a good job in reaching the poor, but this imperfect measure is not decisive. To better evaluate the Brazilian outreach some other characteristics of the market will be considered as well. In Brazil, unlike in many other countries with high prevalence of poverty, almost seventy percent of the poor live in urban areas (Neri, 2008, p.17). Therefore the Brazilian outreach to the poor is less affected by the lack of rural credit supply, than a country where most of the poverty is located in rural areas. Another remarkable characteristic is the fact that the MFIs working with group loan methodology are the biggest both in sense of portfolio and clients (MIX: Brazil 2009 Microfinance Benchmarking Analysis and Report, 2010, p. 3). Typically, Latin American MFIs focusing on group loans only beat other MFI s in number of clients, not in portfolio size (MIX: Brazil 2009 Microfinance Benchmarking Analysis and Report, 2010, p. 3). While the group loan methodology mostly targets the poorer borrowers, this dominance of a group loan methodology would imply a greater outreach. However, this would leave the demand-side problem of the core poor being excluded from the group formation, either by the group or by a lack of self-confidence. To consider to what extent the poor are succeeding in entering the loan groups, we take a closer look at the poverty level of the clients of CrediAmigo. CrediAmigo is Brazils largest MFI serving 49.5% 5 of Brazil s microcredit clients and is often praised for its outreach. It focuses on serving the urban poor (Neri, 2008, p.17). In 2006, 90% of its loans involved solidarity loans in a group (Neri, 2008, p. 41). To obtain a loan the client must be older than 18 years old, have a productive activity and form a group of at least three people who trust and know each other (Neri, 2008, p.201). The only documents needed are an ID, a personal registration number (CPF) 6 and a proof of residency (Neri, 2008, p.210). The proof of residency can also be a telephone or electricity bill, for the people living in 5 Active borrowers CrediAmigo (400,413) as a percentage of total active borrowers of MFIs reporting to MIX in Brazil (809,112). Data for 2008, rounded, Website MIX Market 6 CPF: Cadastro de pessoa física. Brazilian personal registration number for all citizens over 18 years old.

18 17 unregistered areas such as slums. These requirements try to exclude only the ones who are living without any sense of stability, such as the homeless. Unfortunately, there are still Brazilians without a formal identity and birth certificate. According to an estimate of the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística- IBGE) this number has been decreasing until 8.9% of the Brazilian population in 2008 (Figure 9). These people formally do not exist and will therefore not be able to apply for any sort of social assistance, health care or formal employment, let alone credit. They are usually the poorest, since they do not succeed in obtaining the most basic facilities because of the lack of identification. Even in order to obtain a governmental income transfer called Bolsa Familia (Family Scholarship), directed directly to the core poor in Brazil, people need to show a valid CPF (Ministry of Social Development Website). The far majority of the identity-less people lives in the rural North and North-West of Brazil, in the states of Amazonas, Pará and Maranhão (IBGE Website, Statistics of Civil Registration, 2008). In this sense, the rural population in Brazil is indeed more excluded from the supply of credit. Yet, for the urban poor who do have a formal identity and identification, there exist few supply limitations in areas where CrediAmigo operates 7. Figure 9: Estimate of percentage of Brazilian population without a birth certificate, by the Brazilian Institute of Geography and Statistics, 2008 Source: Brazilian Institute of Geography and Statistics Website, Civil Registration Statistics. 7 CrediAmigo operates in municipalities in the North-East Region, the North of the state of Minas Gerais and Espérito Santo and the cities of Brasília, Belo Horizonte and Rio de Janeiro. Data from 2009, Website Banco do Nordeste.

19 18 For CrediAmigo, the average loan balance per borrower was US$ 405 in 2008 (MIX Website). This is almost half of the national average in figure 7. Even though it is a very crude measure, it suggests that the average CrediAmigo client is poorer than the average client served by microcredit in Brazil. Of CrediAmigo s clients, 58% have a monthly family income of less than R$1,000 which is about US$ (Neri, 2008, p.41). This is almost twice the monthly minimum salary of R$510 (Ministry of Work and Employment Website o Ministério do Trabalho e Emprego), However, one has to keep in mind that the first amount refers to family income and the second to an individual income. Almost half of all CrediAmigo s clients, namely 44%, have monthly sales of R$1,000 or less (Neri, 2008, p.208). This is what Neri calls the subsistence group, referring to the small scale of the microenterprise. Finally, Neri (2008, p ) analyses the amount of clients that have crossed the poverty line after participation in the program. This analysis can be used to see the percentage of clients that lived below the poverty line when they entered the program, thereby evaluating the outreach (figure 10). Using operational profit and other received funds (such as social government transfers) as a proxy for income, three types of poverty lines were used and compared (Neri, 2008, p.233). The first is half the minimum wage. The second type of poverty line is constructed by Ipea (Instituto de Pesquisa Econômica Aplicada - Institute of Applied Economic Research). Besides the minimum wage this poverty line also takes into account the differing living standards in the states of Brazil, using different poverty lines for different states. The third poverty line is computed by the Getúlio Vargas Foundation (Fundação Getúlio Vargas - FGV), taking into account not only the differing livings standards in different states but also nutritional needs. Depending on the type of poverty line used, the outreach of credit to the poor living below the poverty line is 32.5%, 29.3% and 14.4%. Thus, only a small quantity of CrediAmigo s clients was living under the poverty line; most clients are upper poor. Taking all of this into consideration, what can be said about the outreach of microcredit in Brazil? Brazil s average loan balance per borrower is smaller than Latin America s average, suggesting a better outreach to the poor. On the supply side this is mostly related to the dominance of group loan methodology, that 8 Rounded, using exchange rate of R$1.8234=US$1of 1 st of June 2010, Website Federal Reserve USA.

20 19 targets poorer borrowers. On the demand-side this is mostly related to the abundance of new clients in the relatively young Brazilian microcredit market. Its scale of provision is not as big as in other Latin American countries yet. Nowadays, CrediAmigo plays an important role in the focus on small loans and outreach. This institution probably pulls down Brazil s value of average loan balance per borrower. Yet, even CrediAmigo hardly serves the people living under the poverty line, since the far majority of its clients are upper poor. Although Brazil s outreach is not bad in comparison to its region, general limitations in outreach to the core poor also apply to Brazil. Firstly, the poor without a formal identity, living in mostly isolated rural areas are indeed hardly served. This matters even though the majority of the poor lives in urban areas, since the degree of poverty in rural areas is often worse. Secondly, exclusion from group formation remains a factor, especially with group lending. Partially, this is a result of delegating the creditworthiness assessment to the co-lenders. This demand-side limitation is unlikely to be overcome, since it is a valuable mechanism enabling to lend to people without a formal track record or credit history. Figure 10: Part of clients living above or below poverty line when entering CrediAmigo credit program, using three different types of poverty lines Poverty line 1/2 minimum wage Ipea Fundação Getúlio Vargas # living above poverty line % living above 67.5% 70.7% 85.6% poverty line # living below poverty line % living below 32.5% 29.3% 14.4% poverty line Total observations: Source: Neri, 2008, p Percentages calculated by the author The impact in reducing poverty Dozens of studies on the impact of microcredit have been done with quite different results. Many show positive effects of credit on the poverty level of the participants (Khandker, 2005; Nader, 2008). However, these improvements generally show the

21 20 smallest poverty reduction for the poorest participants. Nader (2008) measured an increase in income after receiving credit, but while the credit was used for consumption smoothing only it did not help to substantially transform the lives of the women living in extreme poverty. Although the idea of microcredit is to productively invest the loan, in practice, the poorest participants often used the loans for nonproductive consumption ends. This way they failed to produce enough surpluses. In their poverty-impact overview-study, Montgomery and Weiss (2005) refer to nineteen studies in Asia showing that eight of them showed a positive relation between microfinance and income, four showed no relation and seven showed that microcredit had a bigger impact for the better-off. The majority of the studies showed that the upper poor benefited from microcredit, but the poverty lift was the smallest for the core poor (Weiss & Montgomery, 2005, p. 410). In Latin America Montgomery and Weiss (2005, p. 408) found a more general positive poverty reduction effect. But again, for the core poor microcredit in Latin America showed a weak impact (Weiss & Montgomery, 2005, p. 410). Apparently, the common result among these different studies with different outcomes is the fact that the effect of microcredit is proportional to income, showing the weakest improvements for the poorest (Weiss & Montgomery, 2005, p ). The positive correlation between income and the gains from microcredit makes the poorer borrowers gain less than the relatively richer ones. The likelihood of impact is hugely determined by the initial income of the participant, which is very low in the case of the core poor. One way income typically affects the likelihood of impact is via people s human capital. The people with the lowest income tend to have the lowest level of education, the weak health and a limited human capital; a high rate of illiteracy and few skills and knowledge to generate economic value. This makes it harder for them to produce surpluses and to engage in high profit generating activities (Nader, 2008, p. 655). Another characteristic of the core poor is food insecurity. Productive activities are no priority when one is suffering chronic hunger and the loan will likely be spent on basic human needs. Extremely poor families or individuals make no distinction between household income and productive income. The more chronic the poverty, the higher the vulnerability to shocks and the likelier the loan will be spent on something else than a productive investment. For the ones subject to income-

22 21 shocks and the risk of hunger like the core poor, a successful and stable entrepreneurial future is very hard to realize. Although it can be a very effective poverty alleviation tool for the less severe poverty cases, the likelihood that microcredit will reduce core poverty is a lot smaller. To make microcredit work for the core poor it must at least be supplemented with food aid and training. This is exactly what the Bangladesh Rural Advancement Committee (BRAC) has done with their Income Generation for Vulnerable Group Development (IGVGD) Program (Matin, 2002, p. 2). With a program of food grain safety net, training and credit, the women who enrolled were earning significantly more than they had before enrolling. Their income increase in a year was more than the costs of wheat received. After finishing the IGVGD program 80 % of the participants enrolled in BRAC s regular credit program (Matin, 2002, p. 8). Fighting the food insecurity, the lack of skills and the irregularity of income, the program succeeded lifting the participants out of extreme poverty up until the level at which they could join the regular credit programs. It is an example of a more complex perspective of what contributes to core poverty, taking into account the other structural causes. This example does not stand alone. Other programs exist that have successfully integrated microfinance with non-financial services, improving the performance of the clients. An NGO in Bangladesh called Jogorani Chakra has used a similar model as the IGVGD program and an NGO called CARE Bangladesh has successfully combined microfinance with government-guaranteed employment schemes (CGAP Focus, May 2001, p.11). Programs like these are needed to make microfinance a powerful poverty alleviating tool for the chronic poor Impact of Microfinance in Brazil There exists no general overview study of the impact of microfinance in Brazil, however, there are some MFI-specific impact studies. Evaluating the impact of an MFI called São Paulo Confia in the state of São Paulo, Monzoni (2008, p.196) found that one extra percentage of credit led to 0.344% more sales and 0.426% more income. His results were robust, even though his sample constituted of only 175 microfinance clients. Monzoni (2008, p. 197) also found that the income impact was proportional to schooling. This confirms the idea that impact is proportional to income, through the link between income and human capital. In his evaluation of the impact of CrediAmigo Neri (2008, p.210) also found that impact was proportional to

23 22 schooling. Using operational profit as a proxy for income, he found that clients without schooling increased their average operational profit from R$ 654 to R$873; an increase of 33%. For clients that completed primary school the average operational profit increased from R$ 895 to R$1,232; an increase of 38%, and for clients with a form of higher education the increase was from R$1,234 to R$1.944; an increase of 58% (2008, p.211). Neri also computed the percentage of clients that crossed the poverty line after participating in the CrediAmigo program (Figure 10). He used the three types of poverty lines that have been introduced earlier (see Outreach in Brazil). The transition matrix in figure 11 compares the poverty level of clients when they entered the program to their condition in The percentage of clients that succeeded in escaping from poverty during the program is 48.1%, 50.0% and 60.8% for the poverty lines of half the minimum wage, Ipea or Fundação Getúlio Vargas, respectively. The percentage of clients that lived above the poverty line before participating in the program and ended up living under it after the program was small. This was the case for 4.4%, 3.9% and 1.7% for the respective poverty lines of half the minimum wage, Ipea or Fundação Getúlio Vargas. Figure 11: Poverty Transition Matrix of clients of CrediAmigo Fundação Getúlio Entry 1/2 minimum wage Ipea Vargas Condition Not poor Poor Not poor Poor Not poor Poor Not poor Poor % 4.4% 96.1% 3.9% 98.3% 1.7% % 51.9% 50.0% 50.0% 60.8% 39.2% Number of observations: Source: Neri, 2008, p This poverty lifting impact is exceptional keeping in mind that CrediAmigo does not offer any non-financial services along with its credit, such as health, food or education support. However, this minimalistic program would probably succeed in including a lot more clients in this poverty lift, if it would address the more profound causes of chronic poverty. With an eye on financial sustainability, it would probably

24 23 be the best option for CrediAmigo not to provide non-financial services itself, but to seek a partnership. In the example of the IGVGD program the food safety net was provided by the Bangladeshi government in cooperation with microfinance institution BRAC. Partnerships like these hardly exist in Brazil, although they could greatly improve microfinance s impact on the poorest. A more holistic view including nonfinancial services would let the core poor, who are struggling with more than just the lack of credit, reap the fruits of microcredit as well The cost-effectiveness in comparison with other types of aid As much as the donors, non-governmental institutions and MFIs would like to solve the tremendous amount of poverty, the funds to fight poverty are not infinite. Since non-governmental organizations and even governments have been subsidizing MFIs over the last decades, it is important to question if the benefits created are proportional to the funds dedicated to it. Like mentioned before, according to the MIX the global Gross Microloan Portfolio is at least U$ 44 billion (MIX Website, 2009). It needs to be considered if it has been benefitting the people it was intended to benefit and whether these funds could have been spent more effectively in other ways. Therefore, it is important to look at the cost-effectiveness of microfinance in comparison with alternatives of poverty reducing aid. Among the MFIs reporting to MIX, 71 % are profitable and do not need any further subsidies. MFIs that are almost reaching profitability account for another 22 percent 9 (CGAP, Focus Note, January 2010, p.5). However, the fact that some MFIs are not financially sustainable is not necessarily a reason for rejection if the subsidy is serving a social goal. Instead, the benefits created should be compared with the benefits created by spending that same subsidy in a different way, serving the same goal. Aiming at hardcore poverty eradication, minimalistic microcredit programs seem to meet their goal to a limited extent. If microcredit shows a poverty lift proportional to income, trying to solve chronic poverty with microcredit will not `deliver the most bang for the bug` (Morduch, 1999, p. 1600). The core poor take out the smallest loans and the smaller the loans, the costlier they are (Tucker, 2001, p. 110). At the same time, due to the proportionality to income, microcredit has the 9 This excludes five state banks that are not trying to reach financial sustainability (CGAP, Focus Note, January 2010, p.5)

XXIII ENANGRAD. Finanças (FIN) MICROCREDIT IN BRAZIL AND ITS LIMITATIONS AS A CORE POVERTY ALLEVIATION TOOL. Maloe Bosch

XXIII ENANGRAD. Finanças (FIN) MICROCREDIT IN BRAZIL AND ITS LIMITATIONS AS A CORE POVERTY ALLEVIATION TOOL. Maloe Bosch XXIII ENANGRAD Finanças (FIN) MICROCREDIT IN BRAZIL AND ITS LIMITATIONS AS A CORE POVERTY ALLEVIATION TOOL Maloe Bosch Francisco Marcelo Barone Garritano de Nascimento Deborah Moraes Zouain Gustavo de

More information

Acknowledgments Executive Summary

Acknowledgments Executive Summary Foreword p. xiii Acknowledgments p. xv Executive Summary p. xix Abbreviations p. lix Currency Equivalents p. lxxii Assessing Access p. 1 Growth, Poverty Reduction, and Access to Financial Services p. 1

More information

Microfinance in the Modern World. Janell MacDonald. University of Prince Edward Island

Microfinance in the Modern World. Janell MacDonald. University of Prince Edward Island Microfinance in the Modern World 1 Running Head: Microfinance in the Modern World Microfinance in the Modern World Janell MacDonald University of Prince Edward Island Microfinance in the Modern World 2

More information

THE VALUE OF MICROLENDING IN EMERGING ECONOMIES THE CASE OF BRAZIL

THE VALUE OF MICROLENDING IN EMERGING ECONOMIES THE CASE OF BRAZIL THE VALUE OF MICROLENDING IN EMERGING ECONOMIES THE CASE OF BRAZIL Celson Hupfer Banco Itaú Defining Microlending Credit to poor people or micro-entrepreneurs without access to formal credit sources very

More information

Shaping national health financing systems: can micro-banking contribute?

Shaping national health financing systems: can micro-banking contribute? Shaping national health financing systems: can micro-banking contribute? Varatharajan Durairaj, Sidhartha R. Sinha, David B. Evans and Guy Carrin World Health Report (2010) Background Paper, 22 HEALTH

More information

World Health Organization 2009

World Health Organization 2009 World Health Organization 2009 This document is not a formal publication of the World Health Organization (WHO), and all rights are reserved by the Organization. The document may, however, be freely reviewed,

More information

The Impact of Interest Rate Ceilings on Microfinance Industry

The Impact of Interest Rate Ceilings on Microfinance Industry The Impact of Interest Rate Ceilings on Microfinance Industry Ali Saleh Alshebami School of Commerce & Management Science, SRTM University, India E-mail: Talk2aliii@gmail.com Prof. D. M. Khandare School

More information

Commercialization of Microfinance

Commercialization of Microfinance 8/16/2011 1 13 Commercialization of Microfinance Robert Lensink (RUG/WUR) Presentation for the UMM Conference in Frankfurt Schedule 8/16/2011 2 13 Some preliminary remarks Recent trend: commercialization

More information

ABN AMRO / Real Microcredito Self-sustaining micro-finance programs to help Brazil s poor

ABN AMRO / Real Microcredito Self-sustaining micro-finance programs to help Brazil s poor DEDICATED TO MAKING A DIFFERENCE World Business Council for Sustainable Development Case study 2004 This version of the Real Microcredito case study is based on the full business school case prepared by

More information

FINANCING SMALL AND MICRO ENTERPRISES IN AFRICA 2. THE CHARACTERISTICS OF MICROFINANCE ARRANGEMENTS IN AFRICA

FINANCING SMALL AND MICRO ENTERPRISES IN AFRICA 2. THE CHARACTERISTICS OF MICROFINANCE ARRANGEMENTS IN AFRICA FINANCING SMALL AND MICRO ENTERPRISES IN AFRICA 1. THE ISSUES There is the perception that the demand for finance by small enterprises far exceeds the supply, but recent research in 4 countries shows that

More information

Introduction1. Sample Description. Drivers of Costs and the Empirical Approach or Explanatory Variables:

Introduction1. Sample Description. Drivers of Costs and the Empirical Approach or Explanatory Variables: Efficiency Drivers of Microfinance Institutions (MFIs): The Case of Operating Costs 1 Adrian Gonzalez, Researcher, MIX (agonzalez@themix.org) The findings, interpretations, and conclusions expressed in

More information

Chapter 18. MODERN PRINCIPLES OF ECONOMICS Third Edition

Chapter 18. MODERN PRINCIPLES OF ECONOMICS Third Edition Chapter 18 MODERN PRINCIPLES OF ECONOMICS Third Edition Fiscal Policy Outline Fiscal Policy: The Best Case The Limits to Fiscal Policy When Fiscal Policy Might Make Matters Worse So When Is Fiscal Policy

More information

Tenda Atacado: Transforming Business Relations into Partnerships for Growth. Tenda Atacado and Opportunities for the Majority May 2012

Tenda Atacado: Transforming Business Relations into Partnerships for Growth. Tenda Atacado and Opportunities for the Majority May 2012 Tenda Atacado: Transforming Business Relations into Partnerships for Growth Tenda Atacado and Opportunities for the Majority May 2012 Tenda Atacado: Transforming Business Relations into Partnerships for

More information

The recent decline in income inequality in Brazil: magnitude, determinants and consequences. Ricardo Paes de Barros (IPEA)

The recent decline in income inequality in Brazil: magnitude, determinants and consequences. Ricardo Paes de Barros (IPEA) The recent decline in income inequality in Brazil: magnitude, determinants and consequences Ricardo Paes de Barros (IPEA) Cuidad de Guatemala, July 2007 1. Magnitude 0.610 Evolution of inequality in per

More information

MICROFINANCE. Orrick, Herrington & Sutcliffe. Legal guide. Type: Published: Last Updated: Keywords: Microfinance; lending; development.

MICROFINANCE. Orrick, Herrington & Sutcliffe. Legal guide. Type: Published: Last Updated: Keywords: Microfinance; lending; development. MICROFINANCE Orrick, Herrington & Sutcliffe Type: Published: Last Updated: Keywords: Legal guide Microfinance; lending; development. This document provides general information and comments on the subject

More information

WTM Origin Market Seminar 2013. Brazil

WTM Origin Market Seminar 2013. Brazil WTM Origin Market Seminar 2013 Brazil Brazil s Population Population 198.7 million (5 th in the world) Annual growth rate: 1.1% Relatively young population Diverse Ethnicity strong cultural links between

More information

Credit Scoring for Microfinance

Credit Scoring for Microfinance Credit Scoring for Microfinance Can It Work? by Mark Schreiner ABSTRACT: In rich countries, lenders often rely on credit scoring formulae to predict risk based on the performance of past loans with characteristics

More information

Executive summary. Global Wage Report 2014 / 15 Wages and income inequality

Executive summary. Global Wage Report 2014 / 15 Wages and income inequality Executive summary Global Wage Report 2014 / 15 Wages and income inequality Global Wage Report 2014/15 Wages and income inequality Executive summary INTERNATIONAL LABOUR OFFICE GENEVA Copyright International

More information

What is microcredit? Why do poorer people need microcredit? Discuss how the availability of credit might be able to help someone move out of poverty.

What is microcredit? Why do poorer people need microcredit? Discuss how the availability of credit might be able to help someone move out of poverty. What is microcredit? Why do poorer people need microcredit? Discuss how the availability of credit might be able to help someone move out of poverty. INTRODUCTION WHAT IS MICROCREDIT? Microfinance, comprising

More information

The Bolsa Familia Program (BFP)

The Bolsa Familia Program (BFP) The Bolsa Familia Program (BFP) Ministry of Social Development Rio de Janeiro, 13th of June, 2012 BRAZIL Population: 192 million Area: 8.5 million km² 26 states, the Federal District and 5,565 municipalities

More information

Research Insight Efficiency is the key to lower interest rates in microfinance. Executive Summery

Research Insight Efficiency is the key to lower interest rates in microfinance. Executive Summery Research Insight Efficiency is the key to lower interest rates in microfinance Executive Summery March 14 Key findings Microfinance provides hundreds of millions of low-income households with access to

More information

ADS Chapter 219 Microenterprise Development

ADS Chapter 219 Microenterprise Development Microenterprise Development Document Quality Check Date: 02/08/2013 Partial Revision Date: 07/08/2011 Responsible Office: E3 File Name: 219_020813 Functional Series 200 Programming Policy Microenterprise

More information

4. Conducting performance monitoring and evaluation

4. Conducting performance monitoring and evaluation 60 4. Conducting performance monitoring and evaluation IFAD DECISION TOOLS FOR RURAL FINANCE 4. Conducting performance monitoring and evaluation Action: Effectively conduct ongoing and annual performance

More information

Microfinance in Egypt:

Microfinance in Egypt: The Egyptian financial Supervisory authority Microfinance in Egypt: An Overview Ghada Waly Advisor to the Chairman for Microfinance EFSA Content Definition of Microfinance (MF) Historical Background of

More information

SECTOR ASSESSMENT (SUMMARY): MICRO, SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT 1 Sector Road Map 1. Sector Performance, Problems, and Opportunities

SECTOR ASSESSMENT (SUMMARY): MICRO, SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT 1 Sector Road Map 1. Sector Performance, Problems, and Opportunities Small Business and Entrepreneurship Development Project (RRP UZB 42007-014) SECTOR ASSESSMENT (SUMMARY): MICRO, SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT 1 Sector Road Map 1. Sector Performance, Problems,

More information

Chapter 1. The Development Gap

Chapter 1. The Development Gap Chapter 1 The Development Gap STORIES OF CATCH-UP AND DECLINE The development gap emerged because some countries developed earlier than others. In historical perspective the Industrial Revolution : The

More information

Following decades of instability and several natural disasters,

Following decades of instability and several natural disasters, IDA at Work Nicaragua: Innovative Approaches Reach the Poor in Remote Rural Areas IDA is helping Nicaragua to scale-up its model interventions for tacking rural poverty Following decades of instability

More information

Banco Santander HOUSING MICROFINANCE WITH CONSTRUCTION TECHNICAL ASSISTANCE CASE STUDY:

Banco Santander HOUSING MICROFINANCE WITH CONSTRUCTION TECHNICAL ASSISTANCE CASE STUDY: A woman in front of her improved house. HOUSING MICROFINANCE WITH CONSTRUCTION TECHNICAL ASSISTANCE CASE STUDY: Banco Santander HFHI/LAC Executive summary This case study presents key lessons that emerged

More information

South-South Learning Forum 2014. Designing and Delivering Social Protection and Labor Systems

South-South Learning Forum 2014. Designing and Delivering Social Protection and Labor Systems Field Trip Handbook 2 South-South Learning Forum 2014 Designing and Delivering Social Protection and Labor Systems Contents 1. Overview and Objectives... 5 2. Site Information... 5 3. Program Descriptions...

More information

Central Bank of Iraq. Press Communiqué

Central Bank of Iraq. Press Communiqué Central Bank of Iraq Press Communiqué New Central Bank policy instruments Summary At its August 26 meeting, the Board of the Central Bank of Iraq (CBI) adopted a new Reserve Requirement regulation and

More information

Microcredit: A microprimer. Prof. Jay Aronson

Microcredit: A microprimer. Prof. Jay Aronson Microcredit: A microprimer Prof. Jay Aronson Buzzzzzzzzzzzzzz Microcredit has become a development buzzwork, just like human capacity, structural capacity, or sustainability 2005 was dubbed the International

More information

Flat vs Declining Balance Interest Rates What is the Difference?

Flat vs Declining Balance Interest Rates What is the Difference? MFTRANSPARENCY PRICING FUNDAMENTAL Flat vs Declining Balance Interest Rates What is the Difference? One of the main components to the price of a loan is the interest rate. A somewhat abstract concept,

More information

ACCESS TO FINANCIAL SERVICES IN MALAWI: POLICIES AND CHALLENGES

ACCESS TO FINANCIAL SERVICES IN MALAWI: POLICIES AND CHALLENGES UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT Expert Meeting on THE IMPACT OF ACCESS TO FINANCIAL SERVICES, INCLUDING BY HIGHLIGHTING THE IMPACT ON REMITTANCES ON DEVELOPMENT: ECONOMIC EMPOWERMENT

More information

Arab Republic of Egypt: Commercial Microfinance The National Bank for Development

Arab Republic of Egypt: Commercial Microfinance The National Bank for Development Arab Republic of Egypt: Commercial Microfinance The National Bank for Development There is a large unmet demand for microfinance services among the entrepreneurial poor in Egypt. It is estimated that Egypt

More information

TECHNICAL NOTE 2 EQUITY & LEVERAGE IN INDIAN MFIS

TECHNICAL NOTE 2 EQUITY & LEVERAGE IN INDIAN MFIS TECHNICAL NOTE 2 EQUITY & LEVERAGE IN INDIAN MFIS Micro-Credit Ratings International Limited, Gurgaon, India September 2005 The purpose of this technical note is to provide a practical understanding of

More information

V. DEVELOPING SUSTAINABLE MICROFINANCE SYSTEMS

V. DEVELOPING SUSTAINABLE MICROFINANCE SYSTEMS V. DEVELOPING SUSTAINABLE MICROFINANCE SYSTEMS Introduction Ashok Sharma Senior Financial Economist Asian Development Bank While many factors contribute to poverty, its most obvious manifestation is insufficient

More information

Marketing in Microfinance Institutions

Marketing in Microfinance Institutions Innovations in Microfinance This series showcases innovative microfinance programs from the February 2000 Advancing Microfinance in Rural West Africa conference held in Bamako, Mali. The programs emphasize

More information

Figure 1: Gini Index

Figure 1: Gini Index 1 - Introduction Income Inequality and Labor Market Dynamics in Brazil * Fernando de Holanda Barbosa Filho June 9th 2012 Brazil is a country with one of the world s highest levels of income inequality..

More information

Non-bank Microfinance Development Trends in Russia

Non-bank Microfinance Development Trends in Russia Non-bank Microfinance Development Trends in Russia 2003-2004/ Analytical Paper Moscow 2006 This research was supported by a grant from FINCA International. Any opinions expressed herein are the opinions

More information

Flexible Repayment at One Acre Fund

Flexible Repayment at One Acre Fund Executive Summary To meet client needs cost- effectively, on a large scale, and in difficult operating environments, microfinance institutions (MFIs) have relied on simple and standardized loan products.

More information

Portfolio Risk Management. Module 8

Portfolio Risk Management. Module 8 Portfolio Risk Management Module 8 Rural Finance Module 8 Agenda Block 1 Introduction Risk analysis of agriculture and rural loan portfolio: the art of risk analysis Type of risks Portfolio risk management

More information

MICROFINANCE RISK MANAGEMENT HANDBOOK

MICROFINANCE RISK MANAGEMENT HANDBOOK MICROFINANCE RISK MANAGEMENT HANDBOOK Craig Churchill and Dan Coster With Contributions from: Victoria White, Terrence Ratigan, Nick Marudas, Emily Pickrell and Calvin Miller 2001 CARE MICROFINANCE HANDBOOK

More information

IMF Country Report No. 11/365

IMF Country Report No. 11/365 The mortgage finance system in Canada is quite strong, as evidenced by its performance during the recent financial crisis. Home buyers who cannot make a 20 percent down-payment are required to insure their

More information

Inquiry into Access of Small Business to Finance

Inquiry into Access of Small Business to Finance Inquiry into Access of Small Business to Finance Reference http://www.aph.gov.au/senate/committee/economics_ctte/small_business_10/ index.htm The current structure of the financial system means that large

More information

World Bank SME Questionnaire December 2006

World Bank SME Questionnaire December 2006 The World Bank Questionnaire on Bank Financing to SMEs This version: December 8, 2006 Bank: Staff interviewed: Interviewers: Date: This questionnaire is focused on credit to small and medium enterprises

More information

Intelligence on financial inclusion

Intelligence on financial inclusion Intelligence on financial inclusion Financial inclusion and ethnicity: An agenda for research and policy action Despite growing research and policy agendas aimed at tackling financial exclusion, there

More information

Technological Innovation in Brazil - Data Report

Technological Innovation in Brazil - Data Report Technological Innovation in Brazil - Data Report Maria Cecília Junqueira Lustosa Universidade Federal de Alagoas, Brazil cecilialustosa@hotmail.com This data report is part of the project The PBR-5 Network

More information

BETTER LENDING AND BETTER CLIENTS: CREDIT BUREAU IMPACT ON MICROFINANCE

BETTER LENDING AND BETTER CLIENTS: CREDIT BUREAU IMPACT ON MICROFINANCE BETTER LENDING AND BETTER CLIENTS: CREDIT BUREAU IMPACT ON MICROFINANCE by Alain de Janvry alain@are.berkeley.edu, Jill Luoto luoto@are.berkeley.edu, Craig McIntosh ctmcintosh@ucsd.edu, Greg Rafert rafert@are.berkeley.edu,

More information

Electronic Journal of Sociology (2008)

Electronic Journal of Sociology (2008) Electronic Journal of Sociology (2008) ISSN: 1198 3655 The Record of Microfinance: The Effectiveness/Ineffectiveness of Microfinance Programs as a Means of Alleviating Poverty Jon Westover jon.westover@gmail.com

More information

Public debt management and open market operations in Brazil

Public debt management and open market operations in Brazil Public debt management and open market operations in Brazil Luiz Fernando Figueiredo, Pedro Fachada and Sérgio Goldenstein 1 1. Public debt management An inflation targeting regime was introduced in Brazil

More information

NATIONAL SURVEY OF HOME EQUITY LOANS

NATIONAL SURVEY OF HOME EQUITY LOANS NATIONAL SURVEY OF HOME EQUITY LOANS Richard T. Curtin Director, Surveys of Consumers Survey Research Center The October 1998 WP51 The 1988, 1994, and 1997 National Surveys of Home Equity Loans were sponsored

More information

SUMMARY PROGRAM IMPACT ASSESSMENT

SUMMARY PROGRAM IMPACT ASSESSMENT Third Financial Sector Program, Subprogram 2 (RRP VIE 37577) SUMMARY PROGRAM IMPACT ASSESSMENT I. Introduction 1. This program impact analysis (PIA) documents the formulation of the Financial Sector Program

More information

Financial Inclusion in the Philippines

Financial Inclusion in the Philippines Financial Inclusion in the Philippines Issue No. 3 Third Quarter 2013 What is Microcredit? Brief History of Microcredit in the Philippines Unique Features of Microcredit BSP Regulations on Microcredit

More information

Social Security in Latin America

Social Security in Latin America 139 Social Security Leonardo Rangel Social Security in Latin America Technical Officer on Planning and Research at IPEA; Ph.D. student in Public Policy at PPED-UFRJ. 141 Social Security in Latin America

More information

A WORLDWIDE INVENTORY OF MICROFINANCE INSTITUTIONS ABSTRACT

A WORLDWIDE INVENTORY OF MICROFINANCE INSTITUTIONS ABSTRACT -SUSTAINABLE BANKING WITH THE POOR THE WORLD BANK A WORLDWIDE INVENTORY OF MICROFINANCE INSTITUTIONS ABSTRACT A list of nearly 1000 institutions that offer microfinancial services, serve at least 1000

More information

All the Truth about NGO Funding in Kyrgyzstan: Numbers and Facts. Kanykey Jailobaeva

All the Truth about NGO Funding in Kyrgyzstan: Numbers and Facts. Kanykey Jailobaeva All the Truth about NGO Funding in Kyrgyzstan: Numbers and Facts Kanykey Jailobaeva Ph.D Candidate, School of Social and Political Studies, University of Edinburgh Visiting Research Fellow, Social Research

More information

Chapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.)

Chapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.) Chapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.) Chapter Overview This chapter introduces you to a formal analysis of fiscal policy, and puts it in context with real-world data and

More information

Notes - Gruber, Public Finance Chapter 20.3 A calculation that finds the optimal income tax in a simple model: Gruber and Saez (2002).

Notes - Gruber, Public Finance Chapter 20.3 A calculation that finds the optimal income tax in a simple model: Gruber and Saez (2002). Notes - Gruber, Public Finance Chapter 20.3 A calculation that finds the optimal income tax in a simple model: Gruber and Saez (2002). Description of the model. This is a special case of a Mirrlees model.

More information

Evolution of informal employment in the Dominican Republic

Evolution of informal employment in the Dominican Republic NOTES O N FORMALIZATION Evolution of informal employment in the Dominican Republic According to official estimates, between 2005 and 2010, informal employment fell from 58,6% to 47,9% as a proportion of

More information

Mobile Money- What s next?

Mobile Money- What s next? Mobile Money- What s next? Christoph Stork researchictsolutions M-Apps One of the most exciting functions of mobile phones in recent years has been Mobile Money Linked to MM is m-trial balance m-inventory

More information

MICROCREDIT ENTERPRISES. (A California Not-For-Profit Organization) FINANCIAL STATEMENTS DECEMBER 31, 2007

MICROCREDIT ENTERPRISES. (A California Not-For-Profit Organization) FINANCIAL STATEMENTS DECEMBER 31, 2007 (A California Not-For-Profit Organization) FINANCIAL STATEMENTS DECEMBER 31, 2007 TABLE OF CONTENTS Independent auditors' report Page 2 Statement of financial position - December 31, 2007 Statement of

More information

ABN AMRO S REAL MICROCREDITO:

ABN AMRO S REAL MICROCREDITO: ABN AMRO S REAL MICROCREDITO ABN AMRO S REAL MICROCREDITO: A MULTINATIONAL BANK S ENTRY INTO THE MICRO-CREDIT MARKET A TEACHING CASE FROM KENAN-FLAGLER BUSINESS SCHOOL UNIVERSITY OF NORTH CAROLINA Authors

More information

Microfinance in Cambodia

Microfinance in Cambodia Microfinance in Cambodia Investors playground or force for financial inclusion? Sanjay Sinha M-CRIL, December 2013 Introduction to the social investors playground Cambodia is one of the smaller countries

More information

The Sovereign Wealth Fund Initiative Fall 2012

The Sovereign Wealth Fund Initiative Fall 2012 The Sovereign Wealth Fund Initiative Fall 2012 Growing a Middle East- Middle Class: Where Small Investment Goes a Long Way Summary By Elissa McCarter Vice President of Development Finance CHF International

More information

Debt Management. Handle with Care CONTENT NOTE. Definitions

Debt Management. Handle with Care CONTENT NOTE. Definitions Debt Management Handle with Care CONTENT NOTE When you borrow money, you enter the world of debt. It has rules, players and strategies. One of the best things you can do for yourself is to learn how to

More information

Microfinance In the MENA Countries

Microfinance In the MENA Countries Microfinance In the MENA Countries A position paper on Partnership for Development prepared to MENA - Net Conference Cairo - Egypt Dec. 13-17, 1998 Radi Atoom Project Director D.E.F, Jordan 1 1.0 : Preface

More information

Promoting Access and Affordability in Asia s Housing Finance Markets IFC s Experience

Promoting Access and Affordability in Asia s Housing Finance Markets IFC s Experience Promoting Access and Affordability in Asia s Housing Finance Markets IFC s Experience Rachel Freeman IFC Financial Institutions Group Hong Kong September 3, 2015 Housing challenge in Asia Growing populations,

More information

FINANCE for the POOR Equipment Leasing and Lending: A Guide for Microfinance 1

FINANCE for the POOR Equipment Leasing and Lending: A Guide for Microfinance 1 FINANCE for the POOR Equipment Leasing and Lending: A Guide for Microfinance 1 GLENN D. WESTLEY Senior Advisor, Micro, Small and Medium Enterprise Division Inter-American Development Bank As microfinance

More information

Credit Scorecards for SME Finance The Process of Improving Risk Measurement and Management

Credit Scorecards for SME Finance The Process of Improving Risk Measurement and Management Credit Scorecards for SME Finance The Process of Improving Risk Measurement and Management April 2009 By Dean Caire, CFA Most of the literature on credit scoring discusses the various modelling techniques

More information

Located downtown at 1250 6 th Avenue, ACCION San Diego is an independent, 501 (c) (3) non-profit organization that provides economic opportunity to

Located downtown at 1250 6 th Avenue, ACCION San Diego is an independent, 501 (c) (3) non-profit organization that provides economic opportunity to Located downtown at 1250 6 th Avenue, ACCION San Diego is an independent, 501 (c) (3) non-profit organization that provides economic opportunity to micro-entrepreneurs who lack access to traditional forms

More information

Immigrants/ethnic minorities

Immigrants/ethnic minorities Immigrants/ethnic minorities Microcredit Foundation Horizonti Innovative approaches for providing sustainable financial services to the Roma community - Republic of Macedonia Objective: provide sustainable

More information

12.1 Introduction. 12.2 The MP Curve: Monetary Policy and the Interest Rates 1/24/2013. Monetary Policy and the Phillips Curve

12.1 Introduction. 12.2 The MP Curve: Monetary Policy and the Interest Rates 1/24/2013. Monetary Policy and the Phillips Curve Chapter 12 Monetary Policy and the Phillips Curve By Charles I. Jones Media Slides Created By Dave Brown Penn State University The short-run model summary: Through the MP curve the nominal interest rate

More information

Brazil Economic Outlook

Brazil Economic Outlook Brazil Economic Outlook London School of Economics Alexandre Tombini Governor January 2014 1 Brazil overview Brazil is among the largest countries in terms of territory, population and GDP Brazil has vast

More information

Latin America and COP20

Latin America and COP20 ESSAY cities, Latin America and the Caribbean (LAC) increasingly try to engage in global environmental issues, particularly with regards to the challenge of climate change. Latin America and the Caribbean

More information

With lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy.

With lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy. The Digital Economist Lecture 9 -- Economic Policy With lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy. There is still great debate about

More information

INTERIM REPORT FOR REPORTING PERIOD (JANUARY TO JUNE 2007)

INTERIM REPORT FOR REPORTING PERIOD (JANUARY TO JUNE 2007) TRAINING AND MICRO-CREDITS FOR WOMEN S GROUPS A PROJECT FUNDED BY INSTITUT CO-OPERATION BEI ENTWICKLUNGS PROJEKTEN (ICEP) INTERIM REPORT FOR REPORTING PERIOD (JANUARY TO JUNE 2007) EXECUTIVE SUMMARY This

More information

LUMBUNG KREDIT PEDESAAN (LKP) PROGRAM

LUMBUNG KREDIT PEDESAAN (LKP) PROGRAM LUMBUNG KREDIT PEDESAAN (LKP) PROGRAM Program Description The province of Nusa Tenggara Barat (NTB) owns a system of semi-formal financial institutions called Lumbung Kredit Pedesaan (LKP). The author

More information

Land Acquisition and Development Finance Part IV

Land Acquisition and Development Finance Part IV Land Acquisition and Development Finance Part IV In last month s Learn article, we discussed tying up the land and a more in depth formal due diligence process. This article will discuss Development financing.

More information

SUSTAINABLE CONTRACT FARMING FOR INCREASED COMPETITIVENESS: CASE STUDY ON POULTRY SECTOR IN SARAWAK, MALAYSIA

SUSTAINABLE CONTRACT FARMING FOR INCREASED COMPETITIVENESS: CASE STUDY ON POULTRY SECTOR IN SARAWAK, MALAYSIA SUSTAINABLE CONTRACT FARMING FOR INCREASED COMPETITIVENESS: CASE STUDY ON POULTRY SECTOR IN SARAWAK, MALAYSIA BY Sugumar Saminathan National Productivity Corporation The agriculture sector contributed

More information

Economic Commentaries

Economic Commentaries n Economic Commentaries In its Financial Stability Report 214:1, the Riksbank recommended that a requirement for the Liquidity Coverage Ratio (LCR) in Swedish kronor be introduced. The background to this

More information

Development of the government bond market and public debt management in Singapore

Development of the government bond market and public debt management in Singapore Development of the government bond market and public debt management in Singapore Monetary Authority of Singapore Abstract This paper describes the growth of the Singapore Government Securities (SGS) market.

More information

Home HOW TO BUY A WITH A LOW DOWN PAYMENT 3 % A consumer s guide to owning a home with less than three percent down. or less

Home HOW TO BUY A WITH A LOW DOWN PAYMENT 3 % A consumer s guide to owning a home with less than three percent down. or less A consumer s guide to owning a home with less than three percent down. 3 % WITH A LOW DOWN PAYMENT or less HOW TO BUY A Home If you re dreaming of buying a home, congratulations. You re in good company!

More information

Public Authority Debt Structure and New York s Future Generations

Public Authority Debt Structure and New York s Future Generations Public Authority Debt Structure and New York s Future Generations September 2010 Thomas P. DiNapoli New York State Comptroller Additional copies of this report may be obtained from: Office of the State

More information

Frequently Asked Questions About MicroCredit Enterprises

Frequently Asked Questions About MicroCredit Enterprises Frequently Asked Questions About MicroCredit Enterprises This selection of questions is about MicroCredit Enterprises, its goals and organizational operations. Questions concerning our Guarantors, their

More information

World of Labor ELEVATOR PITCH AUTHOR S MAIN MESSAGE. Cons. Pros. University of Maryland Baltimore County, USA, and IZA, Germany

World of Labor ELEVATOR PITCH AUTHOR S MAIN MESSAGE. Cons. Pros. University of Maryland Baltimore County, USA, and IZA, Germany T. H. Gindling University of Maryland Baltimore County, USA, and IZA, Germany Does increasing the minimum wage reduce poverty in developing countries? Whether raising minimum wages reduces or increases

More information

04of 2012. Income Shocks and Household Risk-Coping Strategies: The Role of Formal Insurance in Rural Vietnam POLICY BRIEF: Background

04of 2012. Income Shocks and Household Risk-Coping Strategies: The Role of Formal Insurance in Rural Vietnam POLICY BRIEF: Background POLICY BRIEF: 04of 2012 This policy brief is written based on the study entitled Income Shocks and Household Risk- Coping Strategies: The Role of Formal Insurance in Rural Vietnam written by researchers

More information

Financial inclusion and poverty reduction: the role of financial inclusion in achieving the Millennium Development Goals.

Financial inclusion and poverty reduction: the role of financial inclusion in achieving the Millennium Development Goals. Financial inclusion and poverty reduction: the role of financial inclusion in achieving the Millennium Development Goals. 1. It is indeed a source of deep concern that the number of people living in extreme

More information

MICROCREDIT ENTERPRISES. Financial Statements For the Year Ended December 31, 2013

MICROCREDIT ENTERPRISES. Financial Statements For the Year Ended December 31, 2013 Financial Statements Table of Contents Independent Auditor s Report 1-2 Financial Statements: Statement of Financial Position 3 Statement of Activities 4 Statement of Cash Flows 5 6-18 Page 10900 NE 4th

More information

Recent Developments and Outlook for the Mexican Economy Credit Suisse, 2016 Macro Conference April 19, 2016

Recent Developments and Outlook for the Mexican Economy Credit Suisse, 2016 Macro Conference April 19, 2016 Credit Suisse, Macro Conference April 19, Outline 1 Inflation and Monetary Policy 2 Recent Developments and Outlook for the Mexican Economy 3 Final Remarks 2 In line with its constitutional mandate, the

More information

The following report summarizes the primary findings from this study. A. Institutions involved in Housing Microfinance (HMF)

The following report summarizes the primary findings from this study. A. Institutions involved in Housing Microfinance (HMF) Status Report: Housing Microfinance in Latin America Center for Innovation in Shelter and Finance Regional office for Latin American and the Caribbean, Habitat for Humanity International November 9, 2011

More information

THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics

THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics The current financial crisis in the capital markets combined with recession

More information

Microfinance Regulation in Peru: Current State, Lessons Learned and Prospects for the Future

Microfinance Regulation in Peru: Current State, Lessons Learned and Prospects for the Future ESSAYS ON REGULATION AND SUPERVISION Microfinance Regulation in Peru: Current State, Lessons Learned and Prospects for the Future ALFREDO EBENTREICH April 2005 ESSAYS ON REGULATION AND SUPERVISION No.4

More information

n Economic Commentaries

n Economic Commentaries n Economic Commentaries In recent years, the analysis of household indebtedness has been based on aggregate data or random samples of new borrowers. It is not possible to analyse the allocation of debt

More information

Paid and Unpaid Labor in Developing Countries: an inequalities in time use approach

Paid and Unpaid Labor in Developing Countries: an inequalities in time use approach Paid and Unpaid Work inequalities 1 Paid and Unpaid Labor in Developing Countries: an inequalities in time use approach Paid and Unpaid Labor in Developing Countries: an inequalities in time use approach

More information

CONSUMERLAB. Mobile COMMERCE IN EMERGING MARKETS

CONSUMERLAB. Mobile COMMERCE IN EMERGING MARKETS CONSUMERLAB Mobile COMMERCE IN EMERGING MARKETS An Ericsson ConsumerLab Insight Summary Report January 2015 contents EXAMINING ATTITUDES 3 GROWING URBANIZATION 4 A CASH ECONOMY 6 PERCEPTION IS KEY 7 ECONOMIC

More information

2015 Farm Bank Performance Report Key Findings

2015 Farm Bank Performance Report Key Findings 2015 Farm Bank Performance Report Key Findings The banking industry is the nation s most important supplier of credit to agriculture providing nearly 50 percent of all farm loans in the U.S. $170 billion

More information

Econ 102 Economic Growth Solutions. 2. Discuss how and why each of the following might affect US per capita GDP growth:

Econ 102 Economic Growth Solutions. 2. Discuss how and why each of the following might affect US per capita GDP growth: Econ 102 Economic Growth Solutions 2. Discuss how and why each of the following might affect US per capita GDP growth: a) An increase of foreign direct investment into the US from Europe is caused by a

More information

Developing Credit Reporting in Africa: Opportunities and Challenges

Developing Credit Reporting in Africa: Opportunities and Challenges African Finance for the 21 st Century High-Level Seminar organized by the IMF Institute in collaboration with the Joint Africa Institute Tunis, Tunisia, March 4 5, 2008 Session VI: Designing Context-Specific

More information

UNCTAD Expert Meeting. "Enabling small commodity producers in developing countries to reach global markets"

UNCTAD Expert Meeting. Enabling small commodity producers in developing countries to reach global markets UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT UNCTAD Expert Meeting "Enabling small commodity producers in developing countries to reach global markets" Organized by UNCTAD Commodities Branch Email:

More information

Note: This feature provides supplementary analysis for the material in Part 3 of Common Sense Economics.

Note: This feature provides supplementary analysis for the material in Part 3 of Common Sense Economics. 1 Module C: Fiscal Policy and Budget Deficits Note: This feature provides supplementary analysis for the material in Part 3 of Common Sense Economics. Fiscal and monetary policies are the two major tools

More information