International Development

The Microfinance Business Model: Enduring Subsidy and Modest Profit

The Microfinance Business Model: Enduring Subsidy and Modest Profit
Cull, Robert, Asli Demirgurc-Kunt, and Jonathan Morduch. 2016. "The Microfinance Business Model: Enduring Subsidy and Modest Profit," NYU Financial Access Initiative working paper, July 2016.

Cull, Robert, Asli Demirgurc-Kunt, and Jonathan Morduch
07/26/2016

Recent evidence suggests only modest social and economic impacts of microfinance. Favorable cost-benefit ratios then depend on low costs. We use proprietary data on 1335 microfinance institutions between 2005 and 2009, jointly serving 80.1 million borrowers, to calculate the costs of microfinance and other elements of the microfinance business model. We calculate that on average, subsidies amounted to $132 per borrower, but the distribution is highly skewed. The median microfinance institution used subsidies at a rate of just $26 per borrower, and no subsidy was used by the institution at the 25th percentile. These data suggest that, for some institutions, even modest benefits could yield impressive cost-benefit ratios. At the same time, the data show that subsidy is large for some institutions. Counter to expectations, the most heavily-subsidized group of borrowers are customers of the most commercialized institutions, with an average of $275 per borrower and median of $93. Customers of NGOs, which focus on the poorest customers and on women, receive far less subsidy: the median microfinance NGO used subsidy at a rate of $23 per borrower, and subsidy for the NGO at the 25th percentile was just $3 per borrower.

Local adaptations to a global health initiative: penalties for home births in Zambia

Local adaptations to a global health initiative: penalties for home births in Zambia
Health Policy Plan. (2016) doi: 10.1093/heapol/czw060

Dana Greeson, Emma Sacks, Tsitsi B Masvawure, Katherine Austin-Evelyn, Margaret E Kruk, Mubiana Macwan’gi, and Karen A Grépin
06/02/2016

Global health initiatives (GHIs) are implemented across a variety of geographies and cultures. Those targeting maternal health often prioritise increasing facility delivery rates. Pressure on local implementers to meet GHI goals may lead to unintended programme features that could negatively impact women. This study investigates penalties for home births imposed by traditional leaders on women during the implementation of Saving Mothers, Giving Life (SMGL) in Zambia. Forty focus group discussions (FGDs) were conducted across four rural districts to assess community experiences of SMGL at the conclusion of its first year. Participants included women who recently delivered at home (3 FGDs/district), women who recently delivered in a health facility (3 FGDs/district), community health workers (2 FGDs/district) and local leaders (2 FGDs/district). Findings indicate that community leaders in some districts—independently of formal programme directive—used fines to penalise women who delivered at home rather than in a facility. Participants in nearly all focus groups reported hearing about the imposition of penalties following programme implementation. Some women reported experiencing penalties firsthand, including cash and livestock fines, or fees for child health cards that are typically free. Many women who delivered at home reported their intention to deliver in a facility in the future to avoid penalties. While communities largely supported the use of penalties to promote facility delivery, the penalties effectively introduced a new tax on poor rural women and may have deterred their utilization of postnatal and child health care services. The imposition of penalties is thus a punitive adaptation that can impose new financial burdens on vulnerable women and contribute to widening health, economic and gender inequities in communities. Health initiatives that aim to increase demand for health services should monitor local efforts to achieve programme targets in order to better understand their impact on communities and on overall programme goals.

Portfolios of the Poor: How the World's Poor Live on $2 a Day

Portfolios of the Poor: How the World's Poor Live on $2 a Day
Arabic translation.

Jonathan Morduch, Daryl Collins, Stuart Rutherford, & Orlanda Ruthven
05/24/2016

Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009) tackles the fundamental question of how the poor make ends meet. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world's poor.

These households were interviewed every two weeks over the course of a year, reporting on their most minute financial transactions. This book shows that many poor people have surprisingly sophisticated financial lives, saving and borrowing with an eye to the future and creating complex "financial portfolios" of formal and informal tools.

Indispensable for those in development studies, economics, and microfinance, Portfolios of the Poor will appeal to anyone interested in knowing more about poverty and what can be done about it.

Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed no Net Impact in South India

Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed no Net Impact in South India
September 2015. Journal of Development Economics 116: 1-16.

Jonathan Morduch, Jonathan Bauchet, & Shamika Ravi
05/24/2016

We analyze a randomized trial of an innovative anti-poverty program in South India, part of a series of pilot programs that provide “ultra-poor” households with inputs to create new, sustainable livelihoods (often tending livestock). In contrast with results from other pilots, we find no lasting net impact on income or asset accumulation in South India. We explore concerns with program implementation, data errors, and the existence of compelling employment alternatives. The baseline consumption data contain systematic errors, and income and consumption contain large outliers. Steps to address the problems leave the central findings largely intact: Wages for unskilled labor rose sharply in the area while the study was implemented, blunting the net impact of the intervention and highlighting one way that treatment effects depend on factors external to the intervention itself, such as broader employment opportunities.

Child diarrhea and nutritional status in rural Rwanda: a cross-sectional study to explore contributing environmental and demographic factors

Child diarrhea and nutritional status in rural Rwanda: a cross-sectional study to explore contributing environmental and demographic factors
DOI: 10.1111/tmi.12725

Sheela S. Sinharoy, Wolf-Peter Schmidt, Kris Cox, Zachary Clemence, Leodomir Mfura, Ronald Wendt, Sophie Boisson, Erin Crossett, Karen A. Grépin, William Jack, Jeannine Condo, James Habyarimana and Thomas Clasen
05/23/2016

Objective

To explore associations of environmental and demographic factors with diarrhoea and nutritional status among children in Rusizi district, Rwanda.

Methods

We obtained cross-sectional data from 8,847 households in May–August 2013 from a baseline survey conducted for an evaluation of an integrated health intervention. We collected data on diarrhoea, water quality, and environmental and demographic factors from households with children <5, and anthropometry from children <2. We conducted log-binomial regression using diarrhoea, stunting and wasting as dependent variables.

Results

Among children <5, 8.7% reported diarrhoea in the previous 7 days. Among children <2, stunting prevalence was 34.9% and wasting prevalence was 2.1%. Drinking water treatment (any method) was inversely associated with caregiver-reported diarrhoea in the previous seven days (PR=0.79, 95% CI: 0.68-0.91). Improved source of drinking water (PR=0.80, 95% CI:0.73-0.87), appropriate treatment of drinking water (PR=0.88, 95% CI:0.80-0.96), improved sanitation facility (PR=0.90, 95% CI:0.82-0.97), and complete structure (having walls, floor, and roof) of the sanitation facility (PR=0.65, 95% CI:0.50-0.84) were inversely associated with stunting. None of the exposure variables were associated with wasting. A microbiological indicator of water quality was not associated with diarrhoea or stunting.

Conclusions

Our findings suggest that in Rusizi district, appropriate treatment of drinking water may be an important factor in diarrhoea in children <5, while improved source and appropriate treatment of drinking water as well as improved type and structure of sanitation facility may be important for linear growth in children <2. We did not detect an association with water quality.

Patterns of demand for non-Ebola health services during and after the Ebola outbreak: panel survey evidence from Monrovia, Liberia

Patterns of demand for non-Ebola health services during and after the Ebola outbreak: panel survey evidence from Monrovia, Liberia
DOI: 10.1136/bmjgh-2015-000007 Published 18 May 2016

Ben Morse, Karen A Grépin, Robert A Blair, Lily Tsai
05/18/2016

Introduction The recent Ebola virus disease (EVD) outbreak was unprecedented in magnitude, duration and geographic scope. Hitherto there have been no population-based estimates of its impact on non-EVD health outcomes and health-seeking behaviour.

Methods We use data from a population-based panel survey conducted in the late-crisis period and two postcrisis periods to track trends in (1) the prevalence of adult and child illness, (2) subsequent usage of health services and (3) the determinants thereof.

Results The prevalence of child and adult illness remained relatively steady across all periods. Usage of health services for children and adults increased by 77% and 104%, respectively, between the late-crisis period and the postcrisis periods. In the late-crisis period, (1) socioeconomic factors weakly predict usage, (2) distrust in government strongly predicts usage, (3) direct exposure to the EVD outbreak, as measured by witnessing dead bodies or knowing Ebola victims, negatively predicts trust and usage and (4) exposure to government-organised community outreach predicts higher trust and usage. These patterns do not obtain in the post-crisis period.

Interpretation Supply-side and socioeconomic factors are insufficient to account for lower health-seeking behaviour during the crisis. Rather, it appears that distrust and negative EVD-related experiences reduced demand during the outbreak. The absence of these patterns outside the crisis period suggests that the rebound after the crisis reflects recovery of demand. Policymakers should anticipate the importance of demand-side factors, including fear and trust, on usage of health services during health crises.

Needed: Global Collaboration for Comparative Research on Cities and Health

Needed: Global Collaboration for Comparative Research on Cities and Health
International Journal of Health Policy and Management

Rodwin, VG. and Gusmano, MK.
05/02/2016

Over half of the world’s population lives in cities and United Nations (UN) demographers project an increase of 2.5 billion more urban dwellers by 2050. Yet there is too little systematic comparative research on the practice of urban health policy and management (HPAM), particularly in the megacities of middle-income and developing nations. We make a case for creating a global database on cities, population health and healthcare systems. The expenses involved in data collection would be difficult to justify without some review of previous work, some agreement on indicators worth measuring, conceptual and methodological considerations to guide the construction of the global database, and a set of research questions and hypotheses to test. We, therefore, address these issues in a manner that we hope will stimulate further discussion and collaboration.

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