Microfinance and Human Development: A Cross-Generation Study

Bassi

2021

J of Intl Development

This study uses a dynamic modelling approach to group clients of a microcredit programme in Brazil and follows them over time. Five segments are identified based on variables related to business, owners, families and operations performed within the programme. Results show that borrowers' circumstances are diverse and different actions are needed for each group. Many customers remained in the same segment; some moved to segments with worse conditions. However, the fact that one fourth of borrowers improved conditions is promising, considering the risky nature of entrepreneurial activity and the Brazilian economic context. Our analyses show that mission drift does not occur.

Section: Discussionsupporting

confidence: 90%

Longitudinal analysis of microfinance borrowers in Brazil: A dynamic market segmentation

Bassi

2021

J of Intl Development

“…An interesting finding regards spending for the family: when the business conditions improve, living conditions for the family improve as well (Newman et al, 2014;Garikipati, 2017;Dutta & Banerjee, 2017). Another socio-economic aspect worth noting is that the segments where borrowers are better educated are also those with better business conditions (Staniewski, 2016;Dutta & Banerjee, 2017).…”

Section: Discussionmentioning

confidence: 99%

“…Many researchers in the field have mentioned the need to monitor microfinance clients over time (Newman et al, 2014;Dutta & Banerjee, 2017;Garikipati, 2017), but few studies have involved into a longitudinal analysis. There is nothing in the recent literature on how the situation of microfinance clients evolved over time, judging from their business data and sociodemographic variables.…”

Section: Introductionmentioning

confidence: 99%

Multilevel latent class modeling to segment the microfinance market

Bassi

Freitas

2019

IJBM

Purpose Microfinance has become an important way to alleviate poverty. Though four decades have passed since its introduction, its impact is still not entirely clear. What makes it difficult to ascertain its efficacy is the existence of diverse types of microfinance organizations and client profiles. Microfinance institutions must primarily pay more attention to the client, and to the mechanism through which financial services are delivered. The purpose of this paper is to identify the profiles of microfinance customers and the features of their operations. Design/methodology/approach In this paper, multilevel latent class models were estimated to reveal clusters of operations and classes of clients. Findings The results show that there are six clusters of operations and four classes of clients in the market, each with distinct profiles and needs. Different strategies are recommended for each cluster and class. Originality/value Numerous studies have focused on the importance of getting to know the clients of microfinance programs, but none as yet have used market segmentation as a way to do so. The goal is to generate better strategies to help clients improve their business results. Applying market segmentation to the microfinance market may point to different products for different groups of clients, taking the real needs of each of them into account.

“…In addition, the importance of the products provided by the institutions should be highlighted, ranging from basic credit loans to training, courses, and other social, financial, and psychological support tools (Newman et al, 2014), as these indicate that the role of MFIs goes beyond merely providing credit (Morduch, 1999). Therefore, it is believed that microfinance could have a much greater impact than just financially and that it can improve the lives of future generations because families would be able to afford superior food and education for their children with credit (Dutta & Banerjee, 2017). Moreover, it has been demonstrated that analyses that go beyond the financial issues are important for evaluating improvement in the life conditions of the borrowers, which can come about through consumption, education, health, housing, freedom of choice, self-sufficiency, and gender equality (Banerjee et al, 2017;Cull, Demirgüç-Kunt, & Morduch, 2018;Garikipati, 2017;Khavul, 2010).…”

Section: Environment -Microfinancementioning

confidence: 99%

“…Microfinance has grown rapidly over the past 30 years (Field, Pande, Papp, & Rigol, 2013;Garikipati, 2017;Newman, Schwarz, & Ahlstrom, 2017), becoming one of the main sources of entrepreneurship financing, notably in poor countries or emerging economies (Dutta & Banerjee, 2017;Newman, Schwarz, & Borgia, 2014;Shahriar, Schwarz, & Newman, 2016).…”

Section: Introductionmentioning

confidence: 99%

Cryptocurrencies for Microfinance

Freitas

et al. 2021

BAR, Braz. Adm. Rev.

The objective of microfinance is to provide services to create economic support for borrowers, so they can improve their social condition through entrepreneurial activity. Notwithstanding, credit alone is not sufficient to raise an individual out of poverty. In addition to credit, microfinance institutions can assist by providing professional and management courses, consultancies, financial assistance, and by the formation of solidarity groups. To suggest a way to achieve the microfinance goal, the aim of this article is to propose a cryptocurrency model and an artifact that can contribute to the microfinance environment. This will be supported by a cryptocurrency model and platform based on the design science research methodology. This essay shows that three agents can benefit from the cryptocurrency model: borrowers, microfinance institutions, and educational institutions. Furthermore, the results show that a new market can develop from this model with a viable platform to support the relationship between these agents.