Arieska Wening Sarwosri, Ulf Römer and Oliver Musshoff
The purpose of this paper is to examine whether social and/or cultural obstacles faced by African female farmers diminish their accessibility to lending opportunities provided by…
Abstract
Purpose
The purpose of this paper is to examine whether social and/or cultural obstacles faced by African female farmers diminish their accessibility to lending opportunities provided by a commercial microfinance institution; and affect their repayment performance.
Design/methodology/approach
The underlying data set is comprised of information regarding 9,710 farmers from Madagascar and was provided by the AccèsBanque Madagascar. Logit and Tobit models are applied to determine gender effects on loan accessibility and repayment performance, respectively.
Findings
Even though female farmers are associated with a lower repayment performance, they have a higher rate of loan application approval compared to male farmers.
Research limitations/implications
The results are limited to Madagascar and other African countries with similar socio-economic conditions.
Social implications
Commercial microfinance institutions still provide access to credit for disadvantaged groups, such as female farmers.
Originality/value
To the best of the authors’ knowledge, this is the first study investigating gender-specific credit access and repayment performance of rural African farmers using a data set from a commercial microfinance institution without a social mission for females.
Details
Keywords
In recent years, the application of credit scoring in urban microfinance institutions (MFIs) became popular, while rural MFIs, which mainly lend to agricultural clients, are…
Abstract
Purpose
In recent years, the application of credit scoring in urban microfinance institutions (MFIs) became popular, while rural MFIs, which mainly lend to agricultural clients, are hesitating to adopt credit scoring. The purpose of this paper is to explore whether microfinance credit scoring models are suitable for agricultural clients, and if such models can be improved for agricultural clients by accounting for precipitation.
Design/methodology/approach
This study merges two data sets: 24,219 loan and client observations provided by the AccèsBanque Madagascar and daily precipitation data made available by CelsiusPro. An in- and out-of-sample splitting separates model building from model testing. Logistic regression is employed for the scoring models.
Findings
The credit scoring models perform equally well for agricultural and non-agricultural clients. Hence, credit scoring can be applied to the agricultural sector in microfinance. However, the prediction accuracy does not increase with the inclusion of precipitation in the agricultural model. Therefore, simple correlation analysis between weather events and loan repayment is insufficient for forecasting future repayment behavior.
Research limitations/implications
The results should be verified in different countries and climate contexts to enhance the robustness.
Social implications
By applying scoring models to agricultural clients as well, all clients can benefit from an improved risk assessment (e.g. faster decision making).
Originality/value
To the best of the authors’ knowledge, this is the first study investigating the potential of microfinance credit scoring for agricultural clients in general and for Madagascar in particular. Furthermore, this is the first study that incorporates a weather variable into a scoring model.
Details
Keywords
Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…
Abstract
Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.