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Priced Publications

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"Microfinance and Public Policy", published jointly by Palgrave MacMillan and ILO It is the outcome of a research partnership between the ILO and the Universities of Cambridge, Geneva and the GIDS. Funded by the GIAN, the Ford Foundation and the EU Commission the work probes into the conditions for the controversial "trade-off" between profitability and poverty impact in microfinance institutions (MFIs). Based on empirical surveys of 45 MFIs in 26 countries the study finds that financial performance alone is not a reliable indicator of allocative efficiency; to the contrary, there are many MFIs that operate efficiently, but do not yet fully cover their operating costs because of adverse contextual and market factors, like rural areas, low population densities, covariant risks etc; at the same time there are MFIs whose profitability results from a relative monopoly position and which do not operate efficiently. The book calls on governments, donors and other promoters of microfinance to base their support fundamentally on efficiency, thus allowing MFIs to improve performance whilst maintaining their specific mission, without having to give up poverty impact for better profitability and vice versa. This implies - measuring performance with relative benchmarks (best in class concept), - informed funding arrangements between donors and MFIs, i.e. more longer term, transparent and results-oriented subsidies. The book provides the conceptual framework for the Office's current and future endeavours to mobilize microfinance institutions for more productive employment and decent work, which are, after all, specifications of social performance.

Unpriced Publications

WP 45: The impact of liberalization policies on access to microfinance - the case of Peru - (pdf 948 Kb)
by Alberto Didoni, 2006

WP 42: Linking debt relief to microfinance - (pdf 637 Kb)
by Danny Cassimon and Jos Vaessen, 2006

WP 27: Financial intermediation: A contributing factor to economic growth and employment - (pdf 109 Kb)
by D.M. Gross, 2001, ILO.

The paper presents an overview of the current issues in economic research on the relationship between financial intermediation, growth and employment with a focus on the macroeconomic aspects. Recent empirical findings show that developments in the financial sector, whether on the saving or lending side, do contribute to economic growth. One of the factors influencing the positive impact of financial sector deepening on growth and employment is the ability of firms to raise capital. Evidence is presented that, at the microeconomic level, access to capital through financial intermediaries can be severely restricted because of market distortions and inherent information problems. Such conclusions inevitably call for the design of targeted financial, monetary and fiscal policies that can improve access to capital by excluded populations.

IFLIP working papers in English and French

IFLIP WP01-2: Impact of Financial Sector Liberalisation on Competition and Efficiency in the Ghanaian Banking Industry - (pdf 149 Kb)
K.B. Korsah, E.K. Nyarko, N.A. Tagoe, 2001, ILO.

This paper describes an application of market concentration ratios and Data Envelopment Analysis (DEA) to assess the impact of financial sector liberalisation on the performance of Ghanaian Banks. The market concentration technique ascertains the incidence and intensity of competition; DEA measures the relative performance of banks in a multi input-output scenario. The analytical techniques show that competition has increased and banks have become more efficient although there is evidence of stagnation on both measures in recent years. Further, banks have become more profitable due to the oligopolistic nature of the market that enables them to reap above average profits. These are important findings to the extent that regulators rely on market structure to formulate and evaluate policy decisions.

IFLIP WP01-5: Impact of Microfinance Enterprises on the Efficiency of Micro-Enterprises in Cape Coast  - (pdf 122 Kb)
V.K. Bhasin, W.A. Akpalu, 2001, ILO.

The National Board for Small Scale Industries (NBSSI) performed well in training of SME owners. In the provision of credit, however, NBSSI has not performed according to the expectations of its clients. The informal financial sector still caters more effectively to the needs of micro-enterprises. They generally take loans from friends/relatives and suppliers/clients. There are large variations in the efficiency of capital use of selected professional categories, like hairdressers, dressmakers and wood-processors within each group and across these groups, which indicates scope for improvement in these micro-enterprises.

IFLIP WP03-7: Did financial sector reform result in increased savings and lending for the SMEs and the poor - (pdf 158 Kb)
G. Chigumira, N. Masizandima, 2003, ILO. 

This paper assesses the impact of financial reforms in Zimbabwe on savings and credit availability to small and medium scale enterprises (SMEs) and the poor. The reforms improved domestic savings mobilization due to high deposit rates, the emergence of new financial institutions and products and the general increase in real incomes after the 1990 economic reforms. The study uncovered that inflation and real income were the major determinants of savings during the sample period. High lending rates and the use of conventional lending methodologies by banks restricted access to credit by SMEs and the poor.

ELIFID WP02-3: L'impact de la libéralisation et de la réforme du secteur financier sur les pauvres et les petites opérateurs économiques au Bénin - (pdf 126 Kb)
L. Hoton, A. Soule, 2002, BIT.

En libéralisant son système financier au début des années 1990, le Bénin marquait son entrée dans les débats internationaux sur la libéralisation financière et ses effets. Ce papier fait une revue critique de la littérature produite par les chercheurs nationaux, pendant deux décennies, sur l’impact de la libéralisation financière sur les pauvres et les petits opérateurs économiques. L’étude propose une réorganisation plus offensive de la recherche, au triple plan institutionnel, opérationnel et communicationnel.

IFLIP WP01-4: Gender Access to Credit under Ghana's Financial Sector Reform: A case Study of two Rural Banks in the Central Region of Ghana - (pdf 124 Kb)
E.K. Ekumah, T.T. Essel, 2001, ILO.

The study discusses gender access to credit under Ghana's financial sector liberalization. The results show that even though the reform did not specifically address gender accessibility to credit, it has facilitated the process to strengthen poor women’s access to credit via the introduction of new banking products. There is evidence that gender access to credit has improved with financial sector reforms, yet some of the constraints accessing credit still remain.

IFLIP WP02-6: Financial Intermediation for the Poor: Credit Demand S.K. Akoena by Micro, Small and Medium Scale Enterprises in Ghana - a Further Assignment for Financial Sector Policy - (pdf 182 Kb)
F.A. Gockel, Sl.K. Akoena, 2002, ILO.

Ghana liberalized its financial system by removing policy induced-distortions to enhance competitive banking practices, improve resource mobilization, and increase quantity and quality of investments to a greater number of enterprises at market rates than had hitherto been the case. However, banking has rather become urbanized and elitist with marginalization of local enterprises from credit market. More intriguingly, most credit demands are requests for loans for unbankable projects; credit is therefore not the single most important constraint on local enterprise development as is generally believed. Financial reforms would have to go beyond liberalization if finance is to be productive.

IFLIP WP03-8: The determinants of transaction costs and access to credit by SMEs and the poor in Zimbabwe - (pdf 560 Kb)
L. Masuko, D. Marufu, 2003, ILO.

The focus of the paper is on the determinants of transactions cost and access to credit by SME and the poor in Zimbabwe. Studies have shown that transactions costs constrain the access to credit by SMEs and the poor. This study attempts to answer whether the transactions cost associated with the exchange of credit for a promise to pay later could be minimized to facilitate access to credit by SMEs and the poor. Results from a sample of sixty SMEs show that such costs can be minimized if only policy proposals could target the sources of such costs.

ELIFID WP00-2: Problématique de remboursement des crédits dans les systèmes financiers décentralisés et garantie de prêts; aux petits opérateurs économiques au Bénin - (pdf 140 Kb)
A.N. Honlonkou, D.H. Aclassato, C.V. Quenum, 2000, BIT.

Les Institutions de Micro-Finance (IMF) nées après la libéralisation financière des années 90 pour répondre à la demande spécifique des petites et moyennes entreprises ont très tôt révélé leurs limites en matière de performance de remboursement. La présente étude a identifié les déterminants du taux de remboursement dans les IMF du Bénin au moyen de deux modèles Tobit. Les résultats permettent entre autres de conclure que les garanties immatérielles ont plus d’influence positive sur les taux de remboursement que celles matérielles. L’étude recommande donc que les IMF accordent plus d’importance aux facteurs de motivation de l’emprunteur dans l’octroi des crédits.

ELIFID WP03-4: Libéralisation financière et accès au crédit et à l'épargne des systèmes financiers décentralisés: le cas des femmes au Bénin - (pdf 127 Kb)
R. Gbinlo, Y.Y. Soglo, 2003, BIT.

La libéralisation financière a permis de mettre en place dans les années 90 des systèmes de financement décentralisés qui octroient aux populations défavorisées, de petits crédits compatibles avec leur cycle économique. Ce travail analyse à l’aide du modèle de sélectivité endogène de Heckman l’impact de la libéralisation financière sur l’accès au crédit et à l’épargne par les femmes au Bénin. Les analyses ont révélé entre autres que malgré les réformes, les garanties constituent le principal obstacle à l’accès des femmes aux services financiers. Cependant, les femmes membres d’un groupement surmontent les obstacles liés à la garantie par le biais des cautions solidaires. L’étude suggère donc le développement des crédits de groupe afin d’accroître l’accès d’une frange plus importante de la population féminine aux services financiers.