Contenu du sommaire : Innovations in microfinance and the financial context

The study employs data envelopment analysis to investigate the technical efficiency and the components of microfinance institutions (MFIs) in India using data of selected 41 microfinance institutions of India covering a period of five years (2005-2009). The study also investigates the factors determining efficiency level of microfinance institutions (MFIs) in India. Using both input oriented and output oriented methods of assessing constant returns to scale and variable returns to scale technologies, the mean technical efficiency worked out to be 40.6 per cent which indicates that 59.4 per cent inputs (output) can be reduced (increased) without sacrificing the output (with the same level of inputs). The findings pinpoint that 24 and 10 sampled MFIs in India are realizing economies of scale under input oriented measure and under output oriented measure, respectively. The Tobit regression analysis concludes that total assets, location and borrowers per staff turned out to be significant determinants of technical efficiency in the microfinance institutions of India. The study suggests that new firms can achieve higher level of efficiency with strong fundamentals, rational policy and management. Further, the MFIs should concentrate on their efforts on ground level by increasing the customer base, rather than size in terms of staffing. There is a huge scope and potential for MFIs to amplify their operations in Northern India. JEL Codes: D24, D21, C23

Banks in developing and emerging economies worldwide face challenges and opportunities to extend microfinance to the 2.5 billion unbanked adults extant. The purpose of this research was to focus on the case of Senegal and validate critically important barriers in the formation of positive attitudes towards Internet banking in a Senegalese context. The method was to use a modified, abbreviated Technology Acceptance Model in order to evaluate consumers' perceptions: antecedents of attitude towards Internet banking. A sample of 281 targeted consumers, those with bank accounts and relatively high educational levels, has been collected. Structural equation modeling was employed to test six hypotheses. Perceived facilitating conditions were found to be an antecedent to perceived ease of use and perceived usefulness. Perceived ease of use was not found to be directly significantly related to attitude towards use of Internet banking. However, perceived ease of use was found to be predictive of perceived usefulness and perceived usefulness was found to be predictive of attitude. Finally, perceived risk was confirmed as being predictive of attitude towards use of Internet banking. The value of this research is a theoretical and practical understanding of information technology adoption research within the context of Internet banking within a developing economy at an early adopter stage. An abbreviated technology acceptance model can serve as a basis to model important factors that influence attitude towards the use of Internet banking services. The results of this research will help microfinance providers to develop and implement successful distribution strategies. JEL Codes: G21, M15, M16

Technologies such as MIS may be a solution to lower operating and transaction costs in microfinance. However, the long tail of small Microfinance Institutions (MFIs) finds proprietary software expensive and open source software difficult to adopt. The specificities of the microfinance sector and its large diversity require a high degree of support from MIS suppliers. Shared infrastructure solutions such as Software-as-a-Service (SaaS) offers a good option to bring down costs and remove uncertainties. Essentially, a SaaS provider uses a software solution which they host in the cloud. The MFIs use this and are charged on the number of transactions, accounts or customers. This article provides technical details of how SaaS will operate in an international microfinance setting with its unique problems. To overcome the lack of reliable Internet connectivity encountered whilst working in developing countries, SaaS solution providers must offer flexible approaches such as use of GPRS and as a last resort, a local server as a backup. Case studies on a few early innovators (MicroPlanet Technoloiges, Mambu, IBM, FINO, MOSTFIT, MFiFlex) illustrate the mechanics of this partnership between MIS and Microfinance. Innovation diffusion will require institutional change and institutional work by the change agents. JEL Codes: L86, O14, O32, O33

Product development process occupies a significant position in the life cycle of any organization. Microfinance Institutions (MFIs) have not been an exception to this, despite huge demand from the customers. This paper attempts to map organizational factors in the new product development by some of the MFIs operating in north India. The paper also examines the changes that have taken place in the institutional culture for adopting the new product. Based on this analysis, the study supports the hypotheses that MFI's own institutional strengths and weaknesses rather than market opportunities, play more important role in designing the microfinance products. It further points out that at present, given the huge market potential and low competition, whatever loan products are developed, would be successful among the customers. JEL Codes: G21, M19, M31, L31, O31, D20, D22

A recent set of case studies on resilience of ecocultures forms the basis for our review of and comment on the resilience literature. We note the diversity of definitions of resilience and the confusion this creates in implementing resilience studies and develop a synthesis view that establishes a framework for defining resilience in an implementable way. This framework emphasizes the importance of defining the source of and magnitude of shocks as part of the definition. Next, we outline measurement issues, including a variety of performance measures that can be used to gauge resilience. We argue that self-determination and local ownership of resources is supported in the cases, and review the effectiveness of the informal insurance arrangements observed in the cases. We end with the variables suggested by the case studies to include in a resilience index and lessons for regional governments developing resilience policy. JEL Codes: A12, D80, H41, Q01, R58

What is the impact of microfinance and how can it be measured? This paper analyzes the current status of microfinance and methods that are used to analyze its outreach and its impact. Especially on the background of the discussion about a mission drift in microfinance away from a poverty alleviation concept to a financial system approach the impact indicators of microfinance are discussed. So far, many methods measure the output of microfinance rather than the outcome. An analysis of the current mission of the 50 biggest microfinance institutions will be presented that shows that their missions are much more diverse than poverty alleviation or the financial system approach and that it is not possible to connect missions of microfinance institutions with their outreach. Based on this analysis the concept of Social Return on Investment (SROI) and social cost-benefit calculation will be discussed as methods to assess the impact of microfinance. We apply the methods in an exemplary way to demonstrate how they could be used. Based on this analysis we conclude that outcome-based approaches are better suited to measure the impact and outreach of microfinance but that they need much higher efforts because necessary data has to be assessed and useful indicators have to be developed. JEL Codes: A13, C18, C83, D61, G20

Microfinance consumer protection is identified as essential to the development of inclusive financial systems. Beyond protecting existing consumers, truth-in-lending practices enhance the credibility of Microfinance institutions in providing responsible financial services to un-banked populations. This research explores the value of pricing transparency i.e. the alignment of what a microfinance institution (MFI) communicates as its interest rate to the borrower as compared to its actual interest rate to gauge the robustness of consumer protection relative to the MFI's financial performance. The research applies a focus around the main concerns a manager of an MFI faces when deciding whether to implement transparent loan pricing – namely, that it will not diminish the MFI's performance in terms of profitability, scale or funding. There is compelling evidence that transparency and profitability are not necessarily mutually exclusive. Transparency better serves customers, which leads to an expanded client base with lower default rates and a better reputation for the MFI. It helps attract and retain donors and investors who are increasingly responsive to social performance metrics. Finally, transparent practices form the basis for enhanced accountability, which is fundamental to establishing the credibility of the MFIs in providing financial access to the poor and contributing to the industry's long-term viability. JEL Codes: G21, D82, L25, G23, E43, G28, D18,

Much technological innovation occurs within clusters, to the extent that the creation and enhancement of technological clusters are widely believed to warrant public support. However, an examination of the origins of technological clusters, going back to the late nineteenth century, suggests that efficient and effective public support is difficult to achieve directly: the emergence of the most successful clusters, including Silicon Valley, has owed little to public planning and resources and much to chance and circumstance, while in contrast many conscious public efforts in the U.S. and elsewhere have achieved disappointing results. The paper concludes with a survey of the kinds of public-policy support - generally indirect and focused on the science base - most likely to succeed. JEL Codes: O31, R11, N70, O38, O51-52, H23

This essay examines the consequences of financial innovations for the economic stability through a monetary reappraisal of the Schumpeterian approach and states that changes occurring in financial markets may adversely affect financing conditions of firms and impede economic development. In the economic literature, it is usually asserted that liberalized financial markets lead to innovations that allow banks to provide better risk management, information acquisition, and monitoring services. Therefore financial liberalisation would support the Schumpeterian vision of creative destruction process. However, recent financial crises cast doubt on the creative nature of financial innovations on weakly regulated markets. When speculative bank behaviour gains ground, it leads to the financialisation of economies. Financial markets dominate over the productive activities and provoke disastrous consequences at the macroeconomic level. Unlike the Schumpeterian entrepreneurial innovations, the evolution of financial markets leads to reckless finance that generates destabilizing dynamics. Then the Schumpeterian creative destruction process turns out to be a destructive creation and the systemic sustainability of market economies calls for more consistent regulatory frameworks. JEL Codes: B31, E44, G01, O16, O31