Group Meeting Frequency and Borrowers’ Repayment Performance in Microfinance: Evidence from a Quasi-natural Experiment in South Africa
| Autor: | Giorgio Di Maio, Lucia Dalla Pellegrina, Angela De Michele, Susanna Parravicini, Paolo Landoni |
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| Přispěvatelé: | Dalla Pellegrina, L, De Michele, A, Di Maio, G, Landoni, P, Parravicini, S |
| Rok vydání: | 2021 |
| Předmět: |
group lending
group meetings microfinance quasi-natural experiment repayment delay savings Economics and Econometrics Natural experiment media_common.quotation_subject 050204 development studies Control (management) Psychological intervention SOUTH AFRICA Development law.invention law 0502 economics and business Institution MICROFINANCE FINANCIAL INCLUSION SAVINGS SOUTH AFRICA 050207 economics media_common Finance Microfinance saving business.industry 05 social sciences JEL Classification: G21 I25 L31 O15 FINANCIAL INCLUSION Propensity score matching Survey data collection group meeting Business Social capital |
| Zdroj: | Journal of African Economies. 30:447-477 |
| ISSN: | 1464-3723 0963-8024 |
| DOI: | 10.1093/jae/ejab004 |
| Popis: | A quasi-natural experiment has been carried out in which the Centre Meeting (CM) rules of some centres of a large Microfinance Institution (MFI) that offers microfinance services, in the form of group lending, were changed. The study has been carried out at the Small Enterprise Foundation (SEF), an MFI that operates in South Africa. The frequency of group meetings, organised as part of the “Monthly Centre Meetings” pilot programme, was reduced from bimonthly to monthly, and only one member per credit- group was asked to participate instead of all the group members. The purpose of these changes was to allow borrowers to save time to spend on their own economic activities. This new policy was put into force for one year, from May 2014 to the end of April 2015. After selecting a suitable control group of micro- borrowers, using Propensity Score Matching techniques, we ran difference-in-difference (DID) regressions to evaluate the impact of the policy changes on the client’s repayment and saving behaviour. The obtained estimates suggest that the change in the policy rules had led to a deterioration of the customers’ saving balances and had increased delayed repayments. Text mining techniques, applied to survey data, pointed towards a lack of trust within the groups, the members of which did not meet frequently outside the CMs, and this was found to be one of the main causes of failure of the pilot experiment. We have concluded that group meetings are an effective tool to stimulate the accumulation of social capital for some categories of clients, and that those MFIs that wish to implement similar interventions should be aware of the drawbacks pertaining to borrowers’ behaviour. |
| Databáze: | OpenAIRE |
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