LES DÉTERMINANTS DE LA PERFORMANCE DE REMBOURSEMENT DES MICROCRÉDITS EN TUNISIE

Our work is part of the quest for sustainability of MFIs. To ensure sustainability, an MFI must be effective. It must, among others, face many risks and in particular the default risk. A question arises: what are the determinants of portfolio quality of MFIs? In other words, what are the determinants that influence delays in payment of MFIs? The interest of this research is twofold. The first is practical: knowing the importance of performance measures of microcredit as a precondition for the efficiency and financial performance of MFIs, this study identified determinants of the reimbursement rate in an MFI of Tunisia. It may even give an evidence for banks to intervene on the market of micro credit. The second is methodological: to find the determinants of reimbursement behaviour in MFIs, a binary logistic regression is used, while differing in explanatory variables between key variables and moderators’ ones, which was not met previously in the literature. The results showed that among the variables related to the characteristics of the loan, the loan amount and the borrower's experience with the MFI affect the rate of reimbursement. The credit increases the likelihood of default. Unlike, when borrower's experience with the MFI increases, the risk of default decreases. A relationship between the industry and the repayment rate has not been verified. For variables related to the characteristics of the borrower, age, educational level and marital status of the borrower appear to affect the relationship between the risk of default and the amount of credit. The effect of the credit amount on the default risk decreases as age and level of education increases. In addition, this effect is more important for married compared to the unmarried. For gender, we found that the effect of maturity on the risk of default is not the same for men or women borrowers. It seems that when the maturity increases, men provide reimbursement rates lower than women.     

MEASURING THE EFFICIENCY OF SUB‐SAHARAN AFRICA'S MICROFINANCE INSTITUTIONS AND ITS DRIVERS

This paper uses a large panel data set covering 70 MFIs in 25 Sub‐Saharan African countries to analyze the efficiency of MFIs. This is important, given that MFIs have to operate efficiently to fulfil its dual mission of serving the poor and being sustainable. The results reveal that MFIs are inefficient in meeting the goals of either providing microfinance related services to their clients or intermediating funds between borrowers and depositors. The MFIs lack ability to reach efficient sizes of their performing loan portfolio at the same time they reach an efficient number of clients served.     

Loan officer gender and loan repayment performance. Evidence from greenfield microfinance institutions in Cameroon1

We explore whether loan officer gender affects loan repayment performance in Cameroonian microfinance institutions (MFIs). After controlling for demand-side factors (borrower characteristics), lending methodology, loan contract terms, year, and industry fixed effects, we apply a pooled probit model to a unique loan-level dataset including more than 7000 loans approved between 2007 and 2012 by two Cameroonian commercial MFIs. We find that loans granted and monitored by male loan officers perform better than those granted by female officers and that loans approved under joint liability contracts and monitored by male loan officers are less likely to fall into arrears. Our findings also show that the performance advantage of male loan officers over female officers is confirmed only during bad times. Compared to female loan officers, male loan officers seem to intensify their monitoring efforts during a crisis period. The results are robust after controlling for selection bias and are less sensitive to a change in the loan repayment performance measurement.     

The challenge of rural financial inclusion – evidence from microfinance

Financial inclusion is said to foster development and growth. However, progress in financial inclusion has been slow in rural areas where poverty is most pronounced. This is often attributed to higher transaction costs, higher risks and a more unfavourable contracting environment which makes it more difficult for financial institutions to achieve and maintain sustainability in rural compared to urban areas. Based on data covering 772 microfinance institutions (MFIs) over the period 2008–2013, we test whether rural financial inclusion, notably lending to rural borrowers, is hampered by stronger sustainability challenges than inclusion in urban markets. Our results suggest that a higher share of rural borrowers has no direct effect on MFI sustainability. However, we find that MFIs with a higher share of rural borrowers are less able to exploit economies of scale and productivity effects. Thus, our results provide support for the view that sustainability challenges make it more difficult to achieve progress in financial inclusion in rural than in urban areas.     

Bank loan supply shocks and leverage adjustment

We investigate the effect of bank loan supply shocks on firms’ leverage adjustment. We show that the impact of bank shocks is larger for firms with greater dependence on financially troubled banks. We measure firms’ pre-crisis loan dependence on troubled banks by using matched firm–bank loan data. Using the boom-bust cycle from 1987 to 2014 in Japan as a quasi-experiment, we find that financially constrained firms adjust their leverage slower during credit-crunch periods than during other periods. During credit-crunch periods following banking crisis, firms associated with failing banks or with banks that have a limited capacity to supply loans show a slower adjustment than other firms. Bank shocks have significant effects on small firms’ adjustment but not on that of large firms. These results are robust when we consider demand-side effects and perform other robustness tests. Our results imply that bank shocks have a persistent effect on borrowers’ leverage.     

List randomization for sensitive behavior: An application for measuring use of loan proceeds

Policymakers and microfinance institutions (MFIs) often claim to target poor entrepreneurs who then invest loan proceeds in their businesses. Typically in non-research settings these claims are assessed using readily available but unverified self-reports from client loan applications. Alternatively, independent surveyors could directly elicit how borrowers spent their loan proceeds. That too, however, could suffer from deliberate misreporting. We use data from the Peru and the Philippines in which independent surveyors elicited loan use both directly (i.e., by asking how individuals spent their loan proceeds) and indirectly (i.e., through a list-randomization technique that allows individuals to hide their answer from the surveyor). We find that direct elicitation under-reports the non-enterprise uses of loan proceeds.     

The effect of lender and loan type on a borrowing firm’s equity return

Past empirical studies appear to support the idea that banks and finance companies do not differ in their ability to resolve adverse selection problems associated with issuing new debt. In this article, we find there is a difference. More specifically, using an event study we find larger abnormal returns for secured loan disclosures to lower quality borrowers when the lender is a finance company versus a bank. This suggests the market views finance companies as more effective than banks in evaluating/monitoring lower quality borrowers obtaining secured loans. We posit this is due to finance companies’ greater expertise in this type of lending, resulting from specialization. Our findings extend the literature on how lender identity can influence signals about firm value from loan disclosures. Our results also support recent findings that positive abnormal returns to borrowing firms may not be a general feature across the loan population, but may be restricted to smaller, lower quality borrowers. Finally, we are the first to provide evidence that the market takes loan type into account, not just lender and borrower type, when considering the information embedded in loan disclosures.     

Adverse selection as an explanation of credit rationing and different lender types

An adverse selection model is utilized to demonstrate that informational asymmetry may make it wealth optimal for the financial intermediary (FI) to credit ration and to rationalize the existence of different lenders in the credit market. The crucial assumption is that borrowers differ in their tolerance for a lender-imposed default penalty, the severity of which also varies with the lender. The credit rationing portion proves that the FI will: 1) be forced by a binding regulatory constraint to overinvest in capital; 2) ration its worst risk class borrowers; 3) establish its optimal loan interest rate on the basis of the average quality of its loans and the interest rate elasticity of the borrower demand in its best risk category; and 4) decrease the total loan volume and increase the loan interest rate due to an increase in the capital requirement, but the effect on the default risk quality of its loan portfolio is ambiguous. The existence result is that if a lender has a high default penalty, he can charge a lower rate and attract only “good” borrowers, i.e., heterogeneous lender types encourage the screening of borrowers and vice versa.     

Competition and microfinance

Competition between microfinance institutions (MFIs) in developing countries has increased dramatically in the last decade. We model the behavior of non-profit lenders, and show that their non-standard, client-maximizing objectives cause them to cross-subsidize within their pool of borrowers. Thus when competition eliminates rents on profitable borrowers, it is likely to yield a new equilibrium in which poor borrowers are worse off. As competition exacerbates asymmetric information problems over borrower indebtedness, the most impatient borrowers begin to obtain multiple loans, creating a negative externality that leads to less favorable equilibrium loan contracts for all borrowers.     

Evaluating credit risk and loan performance in online Peer-to-Peer (P2P) lending

Online Peer-to-Peer (P2P) lending has emerged recently. This micro loan market could offer certain benefits to both borrowers and lenders. Using data from the Lending Club, which is one of the popular online P2P lending houses, this article explores the P2P loan characteristics, evaluates their credit risk and measures loan performances. We find that credit grade, debt-to-income ratio, FICO score and revolving line utilization play an important role in loan defaults. Loans with lower credit grade and longer duration are associated with high mortality rate. The result is consistent with the Cox Proportional Hazard test which suggests that the hazard rate or the likelihood of the loan default increases with the credit risk of the borrowers. Finally, we find that higher interest rates charged on the high-risk borrowers are not enough to compensate for higher probability of the loan default. The Lending Club must find ways to attract high FICO score and high-income borrowers in order to sustain their businesses.     

Inflation, Inflation Variability, and Corruption

We present a model where agents can inflate the cost of goods needed to start an investment project and inflation variability increases monitoring costs. We show that inflation variability can lead to higher corruption and lower investment. We document a positive relationship between corruption and inflation variability in a sample of 75 countries. The effect is robust to the inclusion of country fixed effects, other controls, and 2SLS estimation. The results are economically significant: a one standard deviation increase in inflation variance from the median increases corruption by 12 percent of a standard deviation and reduces growth by 0.33 percentage points. Our paper highlights a new channel through which inflation reduces investment and growth, thus bridging the perception gap over the costs of inflation between economists and the public. We also find evidence that political competition reduces corruption and that corruption is pro-cyclical.     

Do microfinance institutions benefit from integrating financial and nonfinancial services?

This article examines the impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of microfinance institutions (MFIs). Using a global data set of MFIs in 77 countries, we find that the provision of nonfinancial services does not harm nor improve MFIs’ financial sustainability and efficiency. The results however suggest that the provision of social services is associated with improved loan quality and greater depth of outreach.     

Unconventional monetary policy and household debt: The role of cash-flow effects

We study the transmission of conventional and unconventional monetary policy shocks via the loan market, distinguishing between adjustable- and fixed-rate mortgages (ARMs and FRMs, respectively) and focusing on the relative importance of the income channel. Under ARMs, a conventional monetary policy shock implies a temporary cash-flow effect leading to a redistribution between savers and borrowers, a feature that is weaker, but more persistent, under FRMs. Also, an easing via unconventional operations – modelled as a shift in households’ preferences that reduces the term premium on long-term loan rates – has an expansionary effect on output and inflation, although more muted than the one recorded via a conventional monetary policy shock. In the former case, we find a modest contribution of cash-flow effect to the dynamics of consumption.     

Individual versus Village Lending: Evidence from Montenegro

This paper analyzes differences in loan performance across two Montenegrin microfinance institutions with different lending techniques using a sample of individuals borrowing from both institutions. We make use of administrative data from both institutions over the period 2004–2013. While one institution relies on village associations for screening and monitoring of borrowers, the other institution uses the individual liability approach. We find that the likelihood to go into arrears is higher for the institution with a strictly individual lending technique, while the likelihood of going into arrears over 30 days is higher for the institution working with village associations. These results are robust to a variety of additional tests, including different definitions of arrears and subsamples. Our findings suggest that the institution using an individual lending technique provides certain flexibility to its clients, while the village‐based microfinance institution might face more strategic default behavior. We provide evidence that once a borrower is in arrears, (s)he is more likely to stay in arrears for more than 30 days in branches with a higher share of borrowers in arrears and in the village‐based lender. Our findings provide evidence that a village‐ or group‐based lending technique is not necessarily superior to the individual lending technique in terms of loan performance.     

Here today,gone tomorrow: Can dynamic incentives make microfinance more flexible?

This paper presents a model of microfinance lending to individuals that uses dynamic incentives, in the form of access to additional loans, to discourage borrowers from strategic default, or the unwillingness to repay a loan once a positive outcome is realized. We propose an improvement on contracts currently used by microfinance institutions (MFIs) by endogenizing the default penalty, while constraining the MFI to maintain sustainable lending operations. Furthermore, accounting for the risks that the poor face by including a negative economic shock, we show that under certain circumstances, the punishment for default need not be a lifetime without loans.     

Do women borrowers augment financial performance of MFIs?

There is some consensus that depth of outreach and financial performance of Microfinance Institutions (MFI) are positively correlated. A majority of microcredit borrowers are women and since the prevalence of female borrowers is even greater among the very poor, there should be a positive correlation between female borrowers and financial performance. Most of the MFIs target women as preferred borrowers. However, no study to date has investigated the relationship between targeting women and MFI’s sustainability with respect to profitability and yield. Utilizing a panel of 892 MFIs over a period of 10 years, this study shows that increased proportion of women borrowers has a statistically significant positive impact on yield and financial performance of MFIs. Consequently, this article also analyses the implication as to whether female borrowers have better repayment rate than male borrowers.     

CORRUPTION AND INCOME INEQUALITY IN THE UNITED STATES

In this study we analyze the effects of corruption on income inequality. Our analysis advances the existing literature in three ways. First, instead of using one of the corruption indices assembled by various investment risk services, we use an objective measure of corruption: the number of public officials convicted in a state for crimes related to corruption. Second, we minimize the problems which are likely to arise because of data incomparability by examining the differences in income inequality across the United States. Finally, we exploit both time series and cross‐sectional variation in the data. We find robust evidence that an increase in corruption increases income inequality. (JEL D31, D73, I32)     

综合收益最优的贷款组合鲁棒优化模型

商业银行信贷经营的基本目标是资金来源与运用在效益性、安全性和流动性上的“三性”平衡,而贷款组合优化配置是商业银行维持或达到资金“三性”平衡的有效方式,也是商业银行信贷经营管理中的重要内容.而贷款的预期收益具有不确定性,如果简单地假设其预期收益率往往会出现与实际脱节的情况,因此需要考虑贷款期间可能出现的变化.针对这一特征,考虑构建风险调整后资本收益率(RAROC)最优的贷款组合鲁棒优化模型.根据某商业银行实际经营数据进行数值分析,结果表明该模型具有鲁棒性,不仅能够兼顾贷款组合综合收益以及未来收益的不确定性因素,同时还可以在贷款组合风险约束范围内获得最大收益,为商业银行贷款优化配置管理提供有效可行的决策依据.     

Two stages credit evaluation in bank loan appraisal

Traditionally, banks conduct standard credit evaluation such as credit scoring following the receipt of loan request and make the accept/reject decision accordingly. This research explores the possibility of two stages credit evaluation in lending process. When the evaluation cost drops below the trigger cost, it pays to conduct the second-stage loan appraisal. We derive two trigger cost thresholds for borrowers who are rated as credible and default in the first stage, respectively. Contingent on the share of good borrowers relative to the bad ones, the optimal strategy of the bank can be differentiated to implement second-stage evaluation on either (1) both types, or (2) only one type, or (3) neither type of the borrowers. We find that during severe economic contractions or in geographic areas/industries which are in deep troubles, whilst the borrowers who repay the loan are out-numbered by the borrowers who fail to pay, the trigger cost for good borrower is higher than that of default borrower. In this scenario, the banks are more inclined to undertake the second-stage credit evaluation on good borrowers. On the other hand, if the percentage of credible borrowers is higher than that of default borrowers, the trigger cost for good borrower lies below the trigger cost of default borrower. As a result, the banks are less inclined to undertake the second-stage evaluation on good borrowers.