Highlighting the importance of carrying correct change helped firms to change their behavior and increase profits.
In countries like Benin, where the rural population suffers from poor health, health education is often viewed as a needed compliment to microcredit, as illness can prevent borrowers from repaying their loans. In this study, researchers partner with non-profit Freedom from Hunger and a microfinance institution in Benin to evaluate the impact on health and social outcomes of integrating health education into female only or mixed-gender group microcredit meetings.
Poor subsistence farmers often see adoption of new technologies, such as hybrid seeds, as risky because they fear the up-front investment will not pay off and they could be worse off, particularly in the case of drought. Yet new technologies can help farmers produce more food. So what happens if the risk of trying a new technology is removed? Few studies have evaluated whether providing insurance can increase the adoption of profitable agricultural technologies.
When smallholder farmers see how fertilizer increases their yields, they may continue using it. In this study in Mozambique, where very few farmers use agricultural inputs, researchers evaluate if giving farmers fertilizer subsidies encourages them to continue using fertilizer when subsidies run out. This study also measures the impact of coupling the subsidies with different types of savings accounts.
How important are differences of opinion within the household for making financial decisions? In this study, married couples in rural Kenya were given the opportunity to open joint and individual bank accounts at randomly assigned interest rates. Researchers assessed if couples with different preferences worked together to save in the highest return account, or if these differences led to poor financial choices.
Trade credit, which is usually provided by up-stream suppliers to down-stream firms, can help small businesses to purchase non-perishable goods for resale and free up resources for other uses. However, provision of trade credit may be limited by high transaction costs, up-stream liquidity constraints, and concerns over repayment.
We evaluate a unique "commitment" savings account, in which individuals restrict their right to withdraw funds until they have reached a self-specified goal. Clients are also given the option to automate transfers from a primary account into the commitment savings account, and given the option of buying a lockbox to store their money, with only the bank possessing a key. The account helped people save more after one year, and increased decision making power for women in the household.
A common sight in developing economies is a series of identical shops, selling the same product at similar prices and all located within extremely close geographical proximity.
Despite the prevalence of female entrepreneurs in developing countries, recent research suggests that women do not benefit from loans and grants in the same way that men do, leading to questions about the value of offering financial services to female entrepreneurs.
Most microfinance institutions follow a rigid contract model: clients repay loans in weekly installments beginning shortly after disbursement. Researchers tested two features of these contracts, repayment frequency and the time of the first repayment, to determine if characteristics of the loan contract affect borrowers’ repayment behavior and the types of investments they make. They found that less frequent repayments did not increase defaults.
Lack of managerial capital remains one of the core challenges to SME growth in developing countries. However, rigorous evidence on the impact of programs focused on improving managerial skills is limited. This study evaluates a program which offers training and consulting for managerial staff in garment factories. It focuses on understanding how new management practices are adopted and implemented and what determines their success.
Can non-financial incentives improve the performance of health care workers in countries with cash-strapped health systems? In this study, researchers evaluated the impact of two types of non-financial incentives aimed at improving the quality of healthcare and the utilization of services at health clinics in Sierra Leone.
In Malawi, most of the population works in agriculture and many people grow just enough food to survive, sometimes less. Agricultural technology can enable farmers to grow more food, but questions remain about how to get farmers to adopt new technologies and more efficient farming methods. Researchers in this study examine if certain established social networks can break down information barriers and increase adoption of new agricultural technology in Malawi.
In the United States, private giving to charitable causes has grown significantly in the past several decades. Among the tactics commonly used to solicit donations are matching gifts. This study explored the importance of price on charitable giving by randomly varying the rates of matching gifts and measuring the subsequent effect on donations.
We evaluate a novel microfinance model in which new customers need to gain sponsorship by an existing customer. We investigate how relationships between individuals and social networks impact repayment behaviour. This individual lending program screens clients and enforces good practices much in the same way as more traditional group lending does, but allows microcredit to be extended to those who might not qualify or be interested in a group liability loan.