Public Policy in Microfinance: Microfinance and Societies

Transcription

1 GEST-Y001 Public Policy in Microfinance: Microfinance and Societies 1 st semester EMP Prof. Marc RAFFINOT, Prof. Isabelle GUERIN Planning Date Time Lecturer Guest speaker Place 11/10/ pm 9 pm Prof. M. Raffinot R /10/ am 12 pm Prof. M. Raffinot R /10/ pm 9 pm Prof. I. Guérin R /10/ pm 9 pm Prof. I. Guérin R /10/ pm 9 pm Prof. I. Guérin R /11/ pm 9 pm Prof. M. Raffinot R /11/ am 12 pm Prof. M. Raffinot R Objectives of the course Show how the financial sustainability and the mission to reach as many poor people as possible might be compatible Explain how mobile phone financial services might be used preserving the use of social relationships in the microfinance process. Introduce the basic needs of non-financial microfinance programs Point out some economic and social dimensions of microfinance heath programs See real cases of microfinance health programs setup and methodology Explain how foreign aid or foreign financing works for enhancing MFIs activities in developing countries in a sustainable way, what are the challenges for improving its effectiveness, and what are the associated risk. See how far can microfinance help to reduce ulnerability, promote employment and empowerment? 1

2 See how microfinance articulate with informal finance Examine the clients perspective and how clients perceive and appropriate microfinance services Show how social networks and cultural backgrounds may affect activities of MFIs (including individual microcredit) Part 1: Prof. M. Raffinot Part 1: Topic covered 1) The financing of MFIs: Support to MFIS: an evolving picture. Organisations, Official, NGOs and commercial lenders. Poverty alleviation and/or financial deepening. Official aid: What are the actors, what are their objectives, their constraints? What is aid (how to measure it)? Principles of allocation of aid at the international level, at the MFIs level. Why does the international aid system rely on principles that are so different from microfinance? Is aid relevant for MFIs? The role of aid: aid to Governments, aid to commercial activities. What are the expectations of Donors about MFIs? Poverty alleviation and/or financial sustainability? Aid effectiveness: the selectivity debate and beyond. The role of subsidies, support and dependence to aid. The Paris Declaration. MFIs in the Aid Market: the aid market (supply and demand; institutions; tools (Project Aid, Budget Aid, Debt Relief); what do (different type of) MFIs need? International financing and MFIs: the international financial markets and Developing countries: the market, the original sin and the exclusion of the poor; Exclusion, debt and debt relief; can MFIs rely on financial markets? Recommended Readings Armendariz B. & Morduch J. (2007), The economics of Microfinance, MIT Press (chapter 9) Balkenhol B. (ed.) (2007), Microfinance and Public Policy, Outreach, Performance and Efficiency, ILO, Palgrave Macmillan. (Also in French, 2009) Boye S., Hajdenberg J. & Poursat Ch. (2006), Microcrédit et épargne pour le développement, Editions d organisation, Paris. CGAP website: Moyo, D. (2009), Dead Aid, Why aid is not working and how there is another way for Africa, Allen Lane, London.

3 Ocampo J.-A., Kregel J. & Griffith-Jones S. (Eds)(2007), International Finance and Development, Orient Longman, Zed Books and Third World Network, in association with the United Nations. Raffinot M. (2008), La dette des tiers mondes, La Découverte, coll. Repères. Part 2: Prof. I. Guérin Part 2: Topics covered Microfinance and Societies 1) Microfinance and informal finance (two sessions) It is now accepted that microfinance supply is too standardised, rigid and does not adequately reflect diversity of financial needs. As a result it is but a very partial substitute for informal financial services and the comparative advantages they offer. This course proposes to explore the diversity and complexity of demand for financial services by learning from informal finance. The following topics will be addressed: a) how poor people manage their money and use a huge diversity of financial tools, both in terms of saving and borrowing (mobile money lending, pawn broking, ROSCAs, saving in kind, etc.) b) how microfinance services are used, appropriated, and sometimes rejected or at least used in a way that was not intended by the providers c) how clients coordinate these services in relation to their other financial practices with greatly diverging effects, which range from substitution (but usually with a threshold effect for both technical and social reasons) to leverage effects (microfinance being a means to improve clients creditworthiness). Readings: Collins D, Morduch J, Rutherford S, Ruthven O. (2009) Portfolios of the Poor: How the World's Poor Live on $2 a Day. Princeton University Press: Princeton. Guérin I. Morvant-Roux S. Villarreal M. (eds) (2013) Microfinance, debt and Over-indebtedness. Juggling with money, London: Routledge, forthcoming. Guérin I. Roesch M. Venkatasubramanian G. (2012) D Espallier B. Credit from whom and for what? Diversity of borrowing sources and uses in rural South-India, Journal of International Development (24): S122-S137. Guérin I. D Espallier B. Venkatasubramanian G. Debt in Rural South India: Fragmentation, Social Regulation and Discrimination, Journal of Development Studies, 0(0): DOI: / [early view].

4 Guérin I., Morvant S, &. Servet J.-M. (2011) Understanding the diversity and complexity of demand for microfinance services: lessons from informal finance, In Armendariz B. & Labie M. (eds) Handbook of Microfinance, London/Singapore: World Scientific Publishing, pp Guérin I. (2011) Do women need specific microfinance services? In Armendariz B. & Labie M. (eds) Handbook of Microfinance, London/Singapore: World Scientific Publishing, pp Rutherford S. (2001) The Poor and their Money, Oxford: Oxford University Press. 2) Microfinance and employment (one session) Microcredit is often considered an efficient tool for self-employment creation. However, reality has shown that the effects of microcredit in terms of employment creation are more limited than what is often expected. Through an analysis of the functioning of labour markets and value-chains, the main purpose of this course is to provide an overview of the conditions and limitations of microcredit as a tool for self-employment creation. Readings: Banerjee A, Duflo E. (2011) Poor economics: a radical rethinking of the way to fight against poverty, New-York: Publicaffairs (chapter on microfinance) Bateman M. (2010) Why doesn t microfinance work? The Destructive Rise of Local Neoliberalism.Zed Books: London. 3) Empowerment (one session) Microfinance has been celebrated for its ability to reach out to women and enhance their welfare and their empowerment. However, reality has shown that the causal relation between microfinance and empowerment is neither linear, nor unequivocal and that it is even less systematic. This course proposes to explore the diversity and the ambiguities of microfinance effects in terms of women s empowerment. The following topics will be addressed: a) empowerment as a subjective and conflicting process b) diversity of gender relationships and the consequences for microfinance c) gender strategies: what does it mean for microfinance? Readings: Armendariz & Morduch (2005) The Economics of Microfinance, MIT. Mayoux, L. (1999). Questioning virtuous spirals: microfinance and women s empowerment in Africa. Journal of International Development, 11(7): Mayoux, L. (2001), Tackling the Down Side: Social Capital, Women s Empowerment and Micro-Finance in Cameroon, Development and Change 32(3):

5 Kabeer, N. (2001) Conflicts Over Credit: Re-evaluating the Empowerment Potential of Loans to Women in Rural Bangladesh, World Development 29(1): Guérin I. Kumar S. Agier I. (2013) Women s empowerment: power to act or power over other women? Lessons from Indian microfinance, Oxford Development Studies, DOI: / [early view] Guérin I., Palier J., (eds), 2004, Microfinance challenges: empowerment or disempowerment of the poor?, Collection Sciences Sociales, Institut Français de Pondichéry. Microfinance and Gender - Dialogue No Dialogue/Dialogue_37_AN.pdf 4) Microfinance crisis

6 Part 1 & 2 Evaluation Written assignment