Search results

This study explores the effect of income diversification strategy on credit risk and market risk of microfinance institutions (MFIs) in Ghana as an emerging market.

The study is based on quarterly data of averagely 271 MFIs that have operated from 2016 to 2018. The dataset is unbalanced and pooled cross-sectional with 3,259 data points. The study measures the diversification strategy using income diversification indices, and accounting ratios to measure the other variables. We utilised the weighted least squares (WLS) approach to explore the nexus.

The findings show that income diversification is associated with better loan quality and credit risk management. Market risk increases with the level of income diversification of microfinance firms. It is evident that large MFIs can manage their credit risks well and can have a low default rate, depicting an overall U-shaped nexus. On the other hand, the effect of size on market risk is an inverted U-shaped. The effect of asset tangibility on credit risk is positively significant while the effect on market risk is negatively significant. High profitability enhances credit risk management leading to lower loan losses while in the case of diversified and profitable MFIs, they tend to invest more in government securities. The results suggest that MFIs that hold more cash and cash equivalents tend to have high loan loss provision and more government securities suggesting much attention should be paid to optimal cash management.

The results throw light on the credit risk and market risk profile of the firms and the effect of diversification strategies on them. The findings are relevant for effective macroprudential regulation, market regulation and prudential regulation of the microfinance sector.

The findings reveal the nature of income diversification strategy of MFIs in emerging markets such as Ghana, pointing out how they affect the risk exposure of MFIs that lend to the pro-poor population.

This is a premier formal assessment of the nexus between income diversification strategies and risk management among MFIs that serve the pro-poor population in the emerging market context.

The purpose of this paper is to explore the factors which are crucial in determining the extent of financial inclusion in geographically remote areas. The study also aims to provide suggestive measures for banks to tap unexplored markets.

Primary data were collected via structured questionnaire from 411 households from the states of Assam and Meghalaya in north‐east India. Factors significantly contributing to inclusion were identified using a logistic regression model.

Level of financial inclusion in north‐east India remains very low. Income, financial information from various channels and awareness of self help groups (SHGs), and education are influential factors leading to inclusion. Nearness to post office banks increases the likelihood of inclusion. Factors like area terrain and receipt of government benefit individually do not facilitate inclusion. However, recipients of government benefits in plain areas show increased level of inclusion.

The study was restricted to north‐east India, which limits the generalizability of the findings.

Banks and policy makers should work in close co‐ordination to spread financial information as those efforts are seen to directly impact inclusion, thereby providing new business opportunities to banks.

Using primary data, this study explores the potential predictors of financial inclusion in geographically remote areas. The study is unique in capturing the conditional relationships among variables which are bound to exist in real life scenarios. The findings of the paper are valuable for banks and policy makers.

The purpose of this paper is to examine the relationship between cooperative practices of accountability, cooperative ownership, advanced communication and non-financial performance in savings and credit cooperative societies.

The study uses a cross-sectional research design and adopted a mixed methodological approach were hypotheses were statistically tested using structural equation modeling based on survey data (n = 220) and narratives from qualitative findings supported the quantitative findings from savings and credit cooperative societies.

The findings reveal that cooperative practices of accountability, cooperative ownership and advanced communication are significantly and positively associated with non-financial performance of savings and credit cooperative societies.

This study provides empirical evidence on the relationship between cooperative practices of accountability, cooperative ownership and advanced communication and non-financial performance in savings and credit cooperative societies in emerging economies like Uganda. To the best of the authors’ knowledge, there is limited or no study that has used the construct of agency theory in explaining the relationship between cooperative practices and non-financial performance in savings and credit cooperative societies.

This paper explores how financial technology (FinTech) organisations address poverty-related challenges when providing digital financial services. Employing the conceptual foundation of the liability of poorness (i.e. literacy gaps, a scarcity mindset, intense non-business pressures and a lack of financial slack), this paper explores the innovative strategies that FinTechs use to address these liabilities and promote entrepreneurship.

The paper uses detailed case data collected from three FinTech organisations operating in one South Asian country.

FinTech organisations' innovative strategies reflect a combination of “high touch” (human) vs “low touch” (digital) solutions. All the organisations simplified internal systems or procedures to accommodate customers. The degree to which the three organisations adopted each of the identified strategies shows an emerging typology of FinTechs; that is, innovators with high digital interactions, a mix of digital-human interactions and high human interactions.

The paper develops a typology which categorises FinTech innovative strategies. The typology highlights strategies pro-poor FinTechs use and explains the types of entrepreneurial support innovative organisations provide for their customers. Both the typology and the innovative strategies contribute to enhanced financial inclusion and entrepreneurial promotion amongst the poor.

The originality of the paper comes from its focus on FinTechs' innovative pro-poor strategies. Existing studies typically address the technology-side of innovations. In contrast, this paper combines innovative strategies with the liability of poorness to identify issues associated with financial inclusion.

Pro-poor innovations are innovations targeted at economically poor consumers. These innovations have the potential to improve consumer wellbeing. However, while take up of some such innovations has been rapid (e.g., mobile phones) take up of others has been slower (e.g., fuel efficient stoves). What explains why some pro-poor innovations fail and some succeed? While the literature on consumer innovation adoption in economically wealthy countries is vast, there is very little literature in the context of the “bottom-of-the-pyramid” (BoP) and subsistence marketplaces. This chapter aims to begin answering this question through a review of the extant literature in the area of consumer innovation adoption, which is integrated with literature in the area of consumption within subsistence marketplaces and the BoP. A conceptual model is proposed which outlines key parameters for marketers and managers. The chapter closes by outlining implications and a future research agenda.

Public–private partnerships (PPPs) have been demonstrated to be an effective (although not universally successful) tool for the delivery of infrastructure and infrastructure-based services. For PPPs to achieve optimum results, the service outputs should be inclusive, i.e., they should be available to as wide a spectrum of society as possible, regardless of income level, gender or ethnic background. In developing countries, many PPPs are reliant upon user fees to create the revenue streams that enable private parties to provide such basic services as power, water, wastewater and transport. When these user fees act as barriers to service access (i.e., they are unaffordable to potential recipients of the service), what are the policy and contractual options which may make the services more universally accessible? This chapter examines three PPP projects from different sectors which have utilized creative mechanisms to enhance affordability and expand the user base: the Pamir Power project in eastern Tajikistan; the urban water PPP in Dakar, Senegal and the East Coast Toll Road in Tamil Nadu, India. Based upon these examples, the chapter will draw conclusions on how this experience can be more broadly applied and made a part of the PPP planning process in developing countries to achieve more affordable and sustainable growth.

This paper aims to critically assess digital finance as a pro-poor intervention in the development finance space.

Using critical policy discourse analysis, this paper explains the turn from microfinance to digital finance, and thereafter discusses four issues: the lack of evidence that digital finance for poor people actually promotes socioeconomic development; the risks that poor people are exposed to, which arises from their exposure to digital finance technology; the lack of evidence that digital finance actually brings poor people immediate benefits; and the weak business rationale for digital finance.

The expectation for digital finance serving as a major pro-poor private sector intervention lacks justification.

The paper reflects on the effect of digital finance for poor people.

To enhance the understanding of the moderating influence of different bottom of the pyramid (BOP) income segments on the antecedents of pro-poor innovation acceptance.

In this study, 320 BOP consumers with a range of low-to-moderate literacy and low-income levels were used as a convenience non-probability sample for undertaking quantitative analyses.

Only the influence of perceived usefulness on intention is moderated by income segments, such that the effect will be stronger for low-income BOP segment. Moreover, the influences of relative advantage, compatibility and observability on intention are moderated by income segments.

This empirical work has considerable private sector and public policy implications for companies and government designing/selling products for millions of poor people in developing and emerging economies.

This study contributes originally to knowledge in the subject area as there are very few studies that clearly and systematically analyse the key antecedents influencing the adoption intention of pro-poor technological innovations in the BOP market.

The purpose of the paper is to examine evidence in order to discover if teleworking has a pro‐poor growth impact – reducing inequality. For this reason, the paper seeks to propose a telework taxonomy for the poor and research questions that trigger future empirical research on poor teleworkers.

The paper's approach is a literature review. The focused literature includes articles that analyze telework issues with a potential for the poor. Such issues are mainly workforce and organizational issues.

There is some evidence that provision of teleworking infrastructure has a dramatic effect on the income and quality of life of the rural poor. Special knowledge management tasks and types of telework can be proper for poor people. Economic and organizational aspects of telecentres for poor workers must be analyzed in depth.

The paper provides a foundation for future research directions in the teleworking domain for the poor. For instance, the discussed implementation aspects of teleworking and the proposed telework taxonomy for the poor as well as the proposed research questions could be used to explore effective penetration of teleworking in poor countries. New conceptual frameworks for implementing telework for the poor can be generated.

An overview is provided of which issues/prerequisites are being considered most broadly and which might provide the most potential for policy makers/managers fighting poverty by using telework.

The paper contributes to the teleworking literature by analyzing how telework can be pro‐poor. It provides a useful overview of the topic. It proposes a telework taxonomy for the poor and three research questions that trigger future empirical research on poor teleworkers.

The purpose of this paper is to assess the correlations between mobile banking and inclusive development (poverty and inequality) in 93 developing countries for the year 2011.

Mobile banking entails the following: “mobile phones used to pay bills” and “mobile phones used to receive/send money”, while the modifying policy indicator includes the human development index (HDI). The data are decomposed into seven sub-panels based on two fundamental characteristics: regions (Latin America, Asia and the Pacific, Central and Eastern Europe, and Middle East and North Africa) and income levels (upper middle income, lower middle income and low income).

The results show that at certain thresholds of the HDI, mobile banking is positively linked to inclusive development. The following specific findings are established. First, the increased use of mobile phones to pay bills is negatively correlated with: poverty in lower-middle-income countries (LMIC), upper-middle-income countries (UMIC) and Latin American (LA) countries, respectively, at HDI thresholds of 0.725, 0.727 and 0.778 and inequality in UMIC and LA with HDI thresholds of, respectively, 0.646 and 0.761. Second, the increased use of mobile phones to send/receive money is negatively correlated with: poverty in LMIC, UMIC and Central and Eastern European (CEE) countries with corresponding HDI thresholds of 0.631, 0.750 and 0.750 and inequality in UMIC, CEE and LA at HDI thresholds of 0.665, 0.736 and 0.726, respectively.

The findings are discussed in the light of current policy challenges in the transition from the UN’s Millennium Development Goals to Sustainable Development Goals.

The authors have exploited the only macroeconomic data on mobile banking currently available.