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Do Microloan Officers Want to Lend to the Less Advantaged? Evidence from a Choice Experiment

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Author Info

  • Sagamba, Moïse

    ()
    (Université Lumiére de Bujumbura and Université de Bretagne Occidentale)

  • Shchetinin, Oleg

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Yusupov, Nurmukhammad

    ()
    (Chaire Banque Populaire, Audencia Nantes School of Management)

Abstract

The mission of microfinance is generally perceived as compensation for the failure of the mainstream financial institutions to deliver access to finance to the poor. Microloan officers have significant influence on microloans allocation as they contact loan applicants and process information inside microfinance institutions (MFIs). We conduct a choice experiment with microloan officers in Burundi to determine which clients are preferred for microloan allocation and whether the less advantaged are indeed targeted. The results suggest that the allocation of microloans is slightly in favor of the less advantaged, whereas the main determinant is the quality of the applicants' business projects. Somewhat surprisingly, we find only small differences in the determinants of the targeted groups between non-profit and profit-seeking MFIs.

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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 492.

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Length: 42 pages
Date of creation: 28 Feb 2011
Date of revision:
Handle: RePEc:hhs:gunwpe:0492

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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: microfinance; choice experiment; microloan officers; non-profit organizations;

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References

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  1. Cull, Robert & Demirguc-Kunt, Asli & Morduch, Jonathan, 2006. "Financial performance and outreach : a global analysis of leading microbanks," Policy Research Working Paper Series 3827, The World Bank.
  2. Mersland, Roy & Strøm, R. Øystein, 2010. "Microfinance Mission Drift?," World Development, Elsevier, vol. 38(1), pages 28-36, January.
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  8. Patrick Francois & Michael Vlassopoulos, 2008. "Pro-social Motivation and the Delivery of Social Services," CESifo Economic Studies, CESifo, vol. 54(1), pages 22-54, March.
  9. John List & Paramita Sinha & Michael Taylor, 2006. "Using choice experiments to value non-market goods and services: Evidence from field experiments," Natural Field Experiments 00278, The Field Experiments Website.
  10. Ibanez, Marcela & Carlsson, Fredrik, 2010. "A survey-based choice experiment on coca cultivation," Journal of Development Economics, Elsevier, vol. 93(2), pages 249-263, November.
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  12. Ghatak, Maitreesh & Guinnane, Timothy W., 1999. "The economics of lending with joint liability: theory and practice," Journal of Development Economics, Elsevier, vol. 60(1), pages 195-228, October.
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  14. Emilios Galariotis & Christophe Villa & Nurmukhammad Yusupov, 2011. "Recent Advances in Lending to the Poor with Asymmetric Information," Journal of Development Studies, Taylor & Francis Journals, vol. 47(9), pages 1371-1390, July.
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Cited by:
  1. Schüring, Esther, 2014. "Preferences for Community-based Targeting - Field Experimental Evidence from Zambia," World Development, Elsevier, vol. 54(C), pages 360-373.

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