Microfinance has been developed as alternative solution for global poverty alleviation effort in the last 30 years. Microfinance institution (MFI) has unique characteristic wherein they face double bottom line objectives of outreach to the poor and financial sustainability. This study proposes a two-stage analysis to measure Islamic Microfinance institutions (IMFIs) performance by comparing them to conventional MFIs. First, we develop a Data Envelopment Analysis (DEA) framework to measure MFIs' efficiency in its double bottom line objectives, i.e. in terms of social and financial efficiency. In the second stage non-parametric tests are used to compare the performance and identify factors that contribute to the efficiency of IMFIs and MFIs.

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Social and financial efficiency of Islamic microfinance institutions:a Data Envelopment Analysis application

Failure to meet a consumer's expectations can result in a negative review, which can have a lasting, damaging impact on a firm's reputation, and its ability to attract new customers. To mitigate the reputational harm of negative reviews many firms now publicly respond to them. How effective is this reputation management strategy in improving a firm's reputation? We empirically answer this question by exploiting a difference in managerial practice across two hotel review platforms, TripAdvisor and Expedia: while hotels regularly respond to their TripAdvisor reviews, they almost never do so on Expedia. Based on this observation, we use difference-in-differences to identify the causal impact of management responses on consumer ratings by comparing changes in the TripAdvisor ratings of a hotel following its decision to begin responding against a baseline of changes in the same hotel's Expedia ratings. We find that responding hotels, which account for 56% of hotels in our data, see an average increase of 0.12 stars in the TripAdvisor ratings they receive after they start responding. Moreover, we show that this increase in ratings does not arise from hotel quality investments. Instead, we find that the increase is consistent with a shift in reviewer selection: consumers with a poor experience become less likely to leave a negative review when hotels begin responding.

Online Reputation Management: Estimating the Impact of Management Responses on Consumer Reviews

Agricultural sectors play an important role in the process of economic development of a country, especially in developing ones. Vietnam is known as an emerging market, which depends directly on agriculture-related activities for their livelihood, in which the issue of rural credit access still remains a confounding problem. The paper focuses on the characteristics of rural credit markets, the determinants of farmer access to the markets, the socio-economic impacts of credit access in Vietnam and briefly comparing with those of some developing countries. This question is addressed by reviewing existing literature and empirical evidence, followed by a comprehensive case study in Vietnam. Comprehensive literature review with secondary data collection and key informant interviews are methods that are applied in this research. The results of this analysis indicate the features of Vietnam markets as participated constraints, government intervention, and segmentation. Other results reveal the significant determinants of credit accessibility. Impacts of credit access on output production, household income, and poverty reduction are highlighted in this paper. Some managerial implications are recommended for households through participation in lending networks; for financial institutions relating to expand target clients as well as capital allocation; and, for policy-makers via ensuring market competitiveness and sustainable development in the long run.

Access to Rural Credit Markets in Developing Countries, the Case of Vietnam: A Literature Review

Formal and informal rural credit in the Mekong River Delta of Vietnam: Interaction and accessibility

Purpose




The purpose of this paper is to analyze determinants of farmers’ participation and credit rationing in microcredit programs using survey data from Ghana.




Design/methodology/approach




The authors use the Garrett Ranking Technique to analyze farmers’ reasons for participation or non-participation in credit programs, a probit regression model to estimate factors influencing farm households’ participation, and the Heckman’s sample selection model to identify factors influencing farm households’ probability of being credit rationed by microcredit programs.




Findings




The results reveal that farm households participate in credit programs because of improved access to savings services and agricultural loans. Fear of loan default and lack of savings are reasons for non-participation in credit programs. Furthermore, membership in farmer-based organizations (FBOs) and the household head’s formal education are positively associated with farmers’ participation in credit programs. The likelihood of farmers being credit rationed (i.e. their loan applications were either rejected or the amount of credit they applied for was reduced) is less likely among higher income farmers and members of FBOs such as farmer cooperatives and savings clubs.




Practical implications




The findings suggest that policy strategies aiming to improve access to savings and credit services should educate farmers and strengthen FBOs that could serve as entry points for financial service providers. Such market smart strategies have the potential to improve farmers’ access to financial services and reduce rural poverty.




Originality/value




Although existing studies have examined farmers’ participation in credit markets and credit rationing separately, the unique contribution of this paper is the analysis of participation in microcredit programs as well as the likelihood of farmers being credit rationed in Ghana.

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Agricultural credit provision: what really determines farmers’ participation and credit rationing?

Accessibility to microcredit by Chinese rural households

Microcredit has gained worldwide acceptance in recent years as a flexible mechanism to expand individuals’ (especially the poor's) access to financial services, which is considered as an efficient way to achieve poverty reduction and other social development. A large number of empirical studies have been done to examine the welfare effects of microcredit on the borrowers and such effects are well documented in many other countries such as Bangladesh. However, the impacts of microcredit on China rural households’ livelihood are not well documented. This paper attempts to empirically evaluate the impact of microcredit on household welfare outcomes such as income and consumption in rural China. The estimation is based on the difference-in-difference approach which is an increasingly popular method of tackling the selection bias issue in assessing the impacts of microcredit. The study uses a two-year panel dataset, including both primary and secondary data collected through a household survey in rural China. Our empirical results favour the wide belief in the literature that joining microcredit programme helps improve households’ welfare such as income and consumption. Despite the optimistic findings on how microcredit has changed the rural households’ living conditions, our results show that the vast majority of the programme participants are non-poor, which casts some doubts on the social potential (such as poverty reduction) of China's microcredit programmes.

Xia Li

Papers

Accessibility to microcredit by Chinese rural households

The welfare impact of microcredit on rural households in China

Who Are Identified as Poor in Rural China’s Targeted Poverty Alleviation Strategy? Applying the Multidimensional Capability Approach

Effect of public expenditure on fertility intention to have a second child or more: Evidence from China's CGSS survey data