Quality financial inclusion and financial vulnerability

Despite existing evidence suggesting that financial inclusion enhances consumers' welfare, there has been no attempt to examine the link between financial inclusion and financial vulnerability, measured along multiple dimensions. We computed more comprehensive indices of financial vulnerability and financial inclusion using polychoric principal component analysis based on a nationally representative financial inclusion survey in South Africa. Results from quantile regressions show that only the top 20% of the financially included had lower vulnerability but the effect was weaker among the more vulnerable categories. Also, the decline in financial vulnerability was less pronounced when financial inclusion was narrowly defined by excluding quality indicators. These findings suggest that financial inclusion is benefitting a few consumers in South Africa which points to the need for a bottom-up approach in designing financial products that improve the welfare of the financially included consumers.     

Cultural patterns influencing project team behavior in Sub‐Saharan Africa: A case study in Ethiopia

Despite the increasing attention paid to the human element of project success found in the project management literature, empirical studies exploring cultural patterns influencing this particular human element continue to be far from satisfactory. To help further understand the influence of cultural patterns within Sub‐Saharan Africa project environments, we draw on a case study conducted in Ethiopia's service sector. Apart from the well‐perceived cultural values commonly referred to in the existing literature, we specifically investigated the deep‐rooted underlying causes, which include Ethiopian cultural habits, as a principal factor in influencing project team behavior. The article concludes with implications and recommendations for future research.     

Complementarity between Relationship Lending and Collateral in SME Access to Bank Credit: Evidence from Ethiopia

ABSTRACT

Despite their contribution to job creation, small and medium enterprises (SMEs) are financially constrained. Lenders view SMEs as high risk borrowers and hence demand collateral, but lack of collateral inhibits SMEs access to credit. Relationship lending is believed to lessen collateral requirement and increase SMEs access to credit. However, recent studies question substitutability of relationship lending and collateral. The present study adds to the debate by drawing on the survey of 102 randomly selected manufacturing SMEs in Ethiopia. Our binary logistic regression results suggest that banks in Ethiopia are cautious in extending credit to SMEs, evidenced by simultaneous usage of relationships, collateral and other criteria, suggesting complementarity between collateral and relationship lending.     

Determinants of household supply of labour in food-for-work programme in Tigray,Ethiopia

We study the factors that determine the household supply of labour in food-for-work (FFW) projects that seek to address food insecurity and help capital formation in development. Based on data from a survey conducted in 2003 in Tigray, Ethiopia, our probit analysis identifies factors that significantly affect the household decision to participate in FFW programmes. We correct for selection bias, and estimate total and excess supply of FFW labour. Our finding of substantial leakages in targeting that allow relatively well-off households to obtain FFW employment yield important implications for the prevailing FFW wage. We also argue that FFW programmes will be more effective if they are designed to account for geographic heterogeneity in such factors as male to female labour participation differences and the incidence of debilitating diseases.     

Optimal block designs for diallel crosses

Dey and Midha (Biometrika 83(2):484–489, 1996) constructed optimal block designs for complete diallel cross experiment using triangular partially balanced incomplete block designs with two associate classes. They listed optimal block designs for the lines in the range from 5 ≤ v ≤ 10. In this paper, we are also proposing additional optimal block designs for complete diallel cross experiment using two associate class partially balanced block designs for some additional values of v. Our method yields designs for proper and non-proper settings for complete diallel cross experiments. The proper and non proper designs are optimal in the sense of Kempthorne (Genetics 41:451–459, 1956) and non-proper designs are universally optimal in the sense of Kiefer (A survey of statistical design and linear models, North Holland, Amsterdam, 1975). The list of practically important designs is also given.     

Equity,Bonds, Institutional Debt and Economic Growth: Evidence from South Africa

We examine the finance‐growth nexus in South Africa accounting for the role of bond markets, stock markets, and bank and non‐bank financial intermediaries using a vector autoregressive technique. Extant empirical literature has largely accounted for only banks and stock markets, ignoring bond market and non‐bank financial intermediaries. We find that bond market development affects economic growth in South Africa, and no similar effect is observed for the bank and non‐bank financial intermediaries and the stock market. Our finding shows that examination of individual elements of the financial system is important in understanding the unique effect of each on growth. The observation that the bond market rather than stock market, bank and non‐bank institutions promote economic growth in South Africa induces an intriguing question as to what unique roles bond markets play that the intermediaries and equity market are unable to play.     

The Dynamics of Bank Concentration,Competition and Efficiency in the East African Community

Journal of Industry, Competition and Trade - The paper examines whether increased bank concentration and lack of competition lead to inefficiency within the East African Community (EAC) banking...