Microfinance competition and multiple borrowing: Evidence using panel data from Bangladesh

Mahmud, Minhaj; Sawada, Yasuyuki; Tanaka, Mari

doi:10.1111/rode.12869

Cited by 9 publications

(14 citation statements)

References 22 publications

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“…However, the number of rural loans in most of the years slightly exceeded the number of rural borrowers, hinting the possibility of certain borrowers obtaining multiple loans. Our findings are consistent with other studies since the issue of multiple borrowing in the microfinance industry has become widespread in recent years (Ewusie et al., 2021; Mahmud et al., 2022).…”

Section: Methodssupporting

confidence: 93%

Loyalty of rural microfinance borrowers: International evidence

Mia

2023

Bulletin of Econ Res

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The growth and financial sustainability of a firm is tied to its ability to retain existing and potential clients. On the contrary, the defection of customers has a huge implication on firms including microfinance institutions (MFIs), suggesting that the attainment of customer loyalty is an important strategy for MFIs to improve their performance. Hence, this study attempts to investigate the level of loyalty demonstrated by rural microfinance borrowers toward their respective service providers. To accomplish this, an unbalanced panel data, comprising 1101 unique MFIs and spanning the timeframe 2010–2018, were obtained from the World Bank database and thereafter subjected to conventional econometric techniques and a series of robustness tests, including endogeneity‐corrected methods, alternative proxies, and sub‐sample analyses. The findings indicate that rural microfinance borrowers generally demonstrate loyalty to their service providers, particularly when measured by borrower retention rates; however, these findings vary with the adopted techniques, sub‐samples, and proxies employed during the analysis.

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Section: Methodssupporting

confidence: 93%

Loyalty of rural microfinance borrowers: International evidence

Mia

2023

Bulletin of Econ Res

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“…Sen (1996) found the pro-poor nature of nonfarm occupations in the rural economy of Bangladesh. Since the 1980s, Bangladesh has observed a vibrant rural credit market, including the microfinance sector, mostly targeting poor women, which has facilitated the rural nonfarm sector (Mahmud, Sawada, and Tanaka 2022;Yu 2021, Hossain et al 2021;Mahmud et al 2021;Islam, Nguyen, and Smyth 2015;Berg, Emran, and Shilpi 2013).…”

Section: Rural Nonfarm Sector Development and Credit Marketmentioning

confidence: 99%

Rural Development in Bangladesh Over Four Decades: Findings from Mahabub Hossain Panel Data and the Way Forward

Malek¹,

Kikkawa²,

Sawada³

et al. 2022

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The Mahabub Hossain Panel Data (MHPD) was initiated in 1988 and maintained by and named after the late Mahabub Hossain, a well-known agricultural and development economist who led a number of reputed organizations in Bangladesh (Bangladesh Institute of Development Studies and BRAC) and in the region (International Rice Research Institute). We portray the historical context, sampling evolution, survey structure and methodology, and academic and policy contributions of the MHPD with some lessons learned for the next step forward. The MHPD has tracked rural households for a period of over 3 decades (1988–2014) with five waves of household surveys covering over 2,800 households and has collected a wide range of information on household composition, schooling of household members, assets, cropping intensity and patterns including cost and return, employment and income, consumption, participation in different government and nongovernment programs. We reviewed several books and journal articles authored by Mahabub Hossain and related academic papers and documents and collated information on MHPD, including (i) mapping out information on past and ongoing panel or cross-sectional household survey data series in Bangladesh; (ii) undertaking the review of all past rounds of MHPD survey documents, such as survey implementation plans, questionnaires, codebooks, databases, and processed data; (iii) consulting relevant stakeholders, including the past implementers of the surveys and the users of the data as needed to validate documented information; (iv) taking stock of the contribution of MHPD to academic literature and policy development; and (v) drawing a number of lessons learned for future data collection and policy making. The report aims to (i) serve as a comprehensive reference document for scholars and policy makers who wish to understand MHPD for possible use in their research; and (ii) provide a comprehensive baseline from which we can consider ways to enhance MHPD further to continue contributing to understanding the economic and social issues of today and near future. By compiling all associated research work based on MHPD, we offer a historical landscape of Bangladesh’s social and economic development and a credible explanation for the Bangladesh development model for global comparison.

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“…an opportunity for few entrepreneurs (usually risk-averse agents) to diversify their risks and large-scale investments, and does not necessarily imply over-indebtedness (Chichaibelu and Waibel, 2017; Lahkar and Pingali, 2014; Lahkar, 2016). To this end, Mahmud et al. (2021) claimed that most multiple borrowing cases in Bangladesh are healthy or solvent.…”

Section: Introductionmentioning

confidence: 99%

“…MFIs) perspective. The other group, which has received less attention and includes peer-reviewed studies such as Boiwa and Bwisa (2014), Chichaibelu and Waibel (2017), Mahmud et al. (2021) and Mpogole et al.…”

Section: Introductionmentioning

confidence: 99%

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Factors affecting multiple borrowing among microfinance clients: evidences from Bangladesh

Ali

Mia

Azman

et al. 2022

APJBA

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PurposeAlthough microfinance had experienced rapid growth in most developing economies, multiple borrowing remains a growing concern for practitioners and researchers in recent years. Hence, the main purpose of the study is to evaluate the factors affecting multiple borrowing among microfinance clients.Design/methodology/approachThe primary survey data of 400 microfinance clients from Bangladesh was collected to execute the research objective. Considering the types of dependent variable, this study employed logistics, probit, ordinary least squares (OLS) and Poisson regression techniques to analyze the data.FindingsAmong others, it was discovered that the expected (requested) loan amount is positively associated with multiple borrowing, while the level of training, small cattle farming business and marital status (widow/separated) exhibited negative effects under logistic regression. These results are robust with respect to the regression method, the specification and the definition of the outcome variable. Also, supply-side incentives (e.g. training) were found to partly influence the multiple-borrowing behavior of microfinance clients. These findings reiterate the contribution of both demand and supply-side factors to the multiple-borrowing behavior of clients. Consequently, policy implications and future research direction are advanced.Originality/valueThe authors have examined some individual-level characteristics as well as some supply-side incentives to better understand the underexplored issue of multiple-borrowing behavior among microfinance clients.

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Microfinance competition and multiple borrowing: Evidence using panel data from Bangladesh

Abstract: Microcredit (small-scale loans) has emerged as one of the most powerful policy tools for providing financial assistance to the poor. The number of poor households with access to microcredit programs has increased globally by more than 18 times over the past 20 years, from 7.6 million in

Cited by 9 publications

References 22 publications

Loyalty of rural microfinance borrowers: International evidence

Loyalty of rural microfinance borrowers: International evidence

Rural Development in Bangladesh Over Four Decades: Findings from Mahabub Hossain Panel Data and the Way Forward

Factors affecting multiple borrowing among microfinance clients: evidences from Bangladesh

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