What can we learn from experience? An impact analysis of experience on households' preferences for microfinance

2020 ◽  
Vol 12 (2) ◽  
pp. 215-239
Author(s):  
Zhao Ding ◽  
Awudu Abdulai ◽  
Yuansheng Jiang
Keyword(s):  
Willingness To Pay ◽  
Latent Variable ◽  
Impact Analysis ◽  
Rural Households ◽  
Bayesian Updating ◽  
Multinomial Logit Model ◽  
Microfinance Institutions ◽  
Random Utility Theory ◽  
Content Type ◽  
The Impact

PurposeThis article examines the impact of experience on rural households' preferences for microfinance attributes, using household data from Sichuan province in China.Design/methodology/approachWe use the Bayesian updating method to account for the learning process involved in acquiring experience on microfinance. We then use the generalized multinomial logit model that accounts for both preference and scale heterogeneity to estimate the choice probabilities and impact of experience on preferences and willingness-to-pay (WTP) for microfinance.FindingsThe empirical findings show that experience with microfinance products or lending institutions helps households in their selections of microfinance institutions. In particular, experience with financial institutions increase the scale parameter and help respondents to feel assured about their choices, while experience with individual lenders have no such effects. The results also indicate that the willingness-to-pay estimates vary across experiences, with WTP for installment credit displaying the biggest change and the Bayesian updating making the changes even much larger.Originality/valueThis study contributes to the research gap by taking experience as a latent variable that influences personal specific tastes and as an integral part of total utility of rural households in their decision-making processes. We develop a conceptual framework that is based on McFadden's random utility theory and Bayesian inference.

Financial and social efficiency analysis of Islamic microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marwa Fersi ◽  
Mouna Bougelbène
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
Risk Taking ◽  
Negative Impact ◽  
Microfinance Institutions ◽  
Social Efficiency ◽  
Content Type ◽  
Islamic Microfinance ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.Design/methodology/approachThe stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.FindingsThe overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.Originality/valueThis paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

The impact of hedonic dining experiences on word of mouth, switching intentions and willingness to pay

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anupama Sukhu ◽  
Anil Bilgihan
Keyword(s):  
Willingness To Pay ◽  
Word Of Mouth ◽  
Internal Validity ◽  
Service Encounters ◽  
Student Sample ◽  
Content Type ◽  
Hedonic Value ◽  
Restaurant Managers ◽  
Positive Word Of Mouth ◽  
The Impact

PurposeWhen customers decide to dine out, they choose a restaurant for both physiological and psychological reasons. The psychological reasons include the hedonic/enjoyment goal of the consumer. The purpose of this paper is to investigate whether dining experiences that provide a positive or negative hedonic value will influence positive word of mouth (PWOM), switching intentions (SI) and willingness to pay (WTP).Design/methodology/approachTwo survey-based experiments using student (N = 112) and general restaurant consumer samples (N = 270) were conducted to test the proposed theoretical model. The student sample provided internal validity, whereas the general consumer sample provided external validity for the study. Two types of manipulations were used to manipulate positive and negative restaurant service encounters. The second study randomly assigned participants into positive or negative scenarios.FindingsThe results suggest that positive (negative) service encounters lead to higher (lower) hedonic value. Higher hedonic value leads to PWOM, WTP and reduced SI. The findings of this study would assist restaurant managers and service scholars by bridging the gap between experiential and relationship marketing.Originality/valueThe current research investigates the dining out experience with a holistic lens.

scholarly journals Revenue diversification and financial sustainability of microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peter Nderitu Githaiga
Keyword(s):  
Generalized Method Of Moments ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Revenue Diversification ◽  
Estimation Model ◽  
Data Set ◽  
Content Type ◽  
Method Of Moments Estimation ◽  
The Impact ◽  
Positive Effect

PurposeThis paper aims to investigate whether revenue diversification affects the financial sustainability of microfinance institutions (MFIs).Design/methodology/approachThe study uses a worldwide panel data set of 443 MFIs in 108 countries for the period 2013–2018 and two-step system Generalized Method of Moments estimation model.FindingsThe study finds that revenue diversification has a significant and positive effect on the financial sustainability of MFIs.Practical implicationsThe findings of this study actually offer important managerial and policy lessons on MFIs’ financial sustainability. Microfinance managers and policymakers should consider revenue diversification as a strategy through which MFIs can attain financial sustainability instead of overreliance on donations and government subsidiesOriginality/valueUnlike previous studies that examined revenue diversification in the context of banking firms, this study contributes to literature by examining the impact of revenue diversification of the financial sustainability of MFIs.

Pushed out or pulled in? Participation in non-farm activities in rural China

2017 ◽  
Vol 9 (1) ◽  
pp. 111-129 ◽  
Author(s):  
Yuanxiang Liu
Keyword(s):  
Rural China ◽  
Rural Households ◽  
Household Survey ◽  
Switching Regression ◽  
Content Type ◽  
Income Gap ◽  
Income Differential ◽  
Farm Production ◽  
Commercial Farming ◽  
The Impact

Purpose The purpose of this paper is to identify the determinants of China’s rural households’ non-farm participation. The authors pay special attention to the effect of potential income differential on this participation. Design/methodology/approach The data used in this study come from a household survey conducted in Hubei Province. The authors estimate participation equation and income equation, respectively, then introduce potential income differential simulated in participation equation to examine its effect on non-farm participation. Findings Potential income differential serves as the major pull factor that favors non-farm participation. Education, proximity to a city and specialized commercial farming are crucial in helping rural households to participate in non-farm production; while the land shortage or the labor surplus act as the push factor in non-farm participation. Better quality of land reduces the household’s propensity to participate in non-farm activities. Moreover, the income gap between households that participate in non-farm activities and pure farmers is mainly determined by the differences in household characteristics. Originality/value The authors use the method of “switching regression and structural probit” to examine the impact of potential income differential on non-farm participation, and simulate the response of the participation probability to the change of potential income differential. The authors also analyze the sources of income gap between non-farm and farm households using Oaxaca decomposition.

Financial disclosure and performance of microfinance institutions

2014 ◽  
Vol 10 (3) ◽  
pp. 314-337 ◽  
Author(s):  
Shakil Quayes ◽  
Tanweer Hasan
Keyword(s):  
Financial Performance ◽  
Least Squares ◽  
Least Squares Method ◽  
Financial Disclosure ◽  
Microfinance Institutions ◽  
Content Type ◽  
Three Stage Least Squares ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to analyze the relationship between financial disclosure and the financial performance of microfinance institutions (MFIs). Design/methodology/approach – The paper utilizes ordinary least squares method to analyze the impact of disclosure on financial performance, an ordered probit model to investigate the possible effect of financial performance on disclosure and utilizes a three-stage least squares method to delineate the endogenous relationship between disclosure and financial performance of MFIs. Findings – The paper finds that better disclosure has a statistically significant positive impact on operational performance of MFIs; second, it also shows that improved financial performance results in better financial disclosure. Keeping the endogenous nature of the relationship between disclosure and performance, the paper uses a three-stage least squares method to show that disclosure and financial performance positively affect each other simultaneously. Research limitations/implications – The paper attempts to delineate a positive association between better disclosure on financial performance of MFIs, which can be used for developing a better disclosure policy by management, formulating more effective guidelines for disclosure by the stakeholders and mandating more appropriate laws and uniform disclosure practice by regulators. Originality/value – This is the first study that uses a large number of MFIs from 75 countries; second, it uses a uniform scale of designating a disclosure rating (assigned by MIX Market) to show the relationship between disclosure and performance. Finally, it uses three-stage least squares method to address the possible endogeneity between disclosure and performance.

Italian millennials' preferences for wine: an exploratory study

2020 ◽  
Vol 122 (8) ◽  
pp. 2403-2423
Author(s):  
Federico Nassivera ◽  
Gianluigi Gallenti ◽  
Stefania Troiano ◽  
Francesco Marangon ◽  
Marta Cosmina ◽  
...  
Keyword(s):  
New Media ◽  
Willingness To Pay ◽  
Carbon Footprint ◽  
Generation Y ◽  
Logit Model ◽  
Random Parameter ◽  
Multinomial Logit Model ◽  
Discrete Choice Models ◽  
Content Type ◽  
Wine Consumption

PurposeThis paper aims to investigate the wine consumption among young people belonging to the so-called millennial generationDesign/methodology/approachThis study uses a questionnaire and a choice experiment (CE) with a multinomial logit model (MNL), implementing a random parameter logit model (RPL), to investigate the attitudes of millennials towards wine consumption, their purchasing behaviours and their willingness to pay for attributes of the products; in particular regarding the follwing: region of origin, “winescape”, certification, carbon footprint claim and price.FindingsMillennials appear to drink wine less frequently; they consume it more often in social on-premise settings, having a slightly higher willingness to pay and preferring carbon-neutral brands when choosing wine.Research limitations/implicationsThe limitation of this research was the analysis of a simulated situation where consumers declared their intention to purchase and not the effective purchase behaviour in the market.Further research should investigate wider millennials groups, also using the new media communication tools that characterise the communication behaviour of Generation Y. In this way, it would be possible to interview a millennial group at the national or international level.Practical implicationsThe research identifies some characteristics of millennials’ habits that can take into account the strategies of wine companies in order to develop a constructive relationship with Generation Y in Italy.Social implicationsThis research contributes to knowledge regarding the wine consumption habits of Italian millennials.Originality/valueThis paper applies discrete choice models to consumption situations in order to analyse millennials' preference and their willingness to pay for some innovative attributes of wine, in particular the carbon footprint.

Profitability vs Poverty alleviation: has banking logic influences Islamic microfinance institutions?

2019 ◽  
Vol 4 (2) ◽  
pp. 260-279
Author(s):  
Luqyan Tamanni ◽  
Mohd Hairul Azrin Haji Besar
Keyword(s):  
Mission Statements ◽  
Annual Reports ◽  
Microfinance Institutions ◽  
Local Data ◽  
Content Type ◽  
Related Information ◽  
The Poor ◽  
Islamic Microfinance ◽  
The Impact ◽  
Primary Mission

Purpose The purpose of this paper is to shed some lights on the process of mission drifting or abandoning poverty objective by Islamic microfinance institutions (IMFs). The paper investigates whether the extensive use of banking logic changes IMFs, from focusing on both development and financial objectives to only considering sustainability as their primary mission. Design/methodology/approach This paper adopts mixed methods by analyzing 7,200 microfinance data from Microfinance Exchange Market and reviewing annual reports and websites of 25 IMFs to examine their vision and mission statements and other related information. Findings The finding shows Islamic microfinance has not changed, despite increasing adoption of financial or banking performance measures. However, size and age of the institutions may affect the outcome in the future. The authors find that smaller microfinance institutions maintain genuine objective to serve the poor, as the grow larger they would be more inclined toward sustainability objectives. Research limitations/implications The research is limited on the sample size as data on Islamic microfinance globally is limited. However, the paper looked at the global data rather than local data to compensate for this limitation. Future study would be further taking the study through qualitative methods to support the study. Originality/value This paper aims to shed some lights on the process of mission drifting or abandoning poverty objective by IMFIs. The paper investigates how has the extensive use of financing logic has changed IMFIs from focusing on both development and financial objectives to only considering sustainability as their primary mission. Arun and Hulme (2009) argued that the interaction of multiple logic within microfinance institutions, i.e. financial vs social, could pose some serious management dilemmas within microfinance institutions. Further, commercialization puts pressure on the field staffs to achieve financial targets and often neglect their poverty outreach mission to the poor. The well-known crisis in Andhra Pradesh, India where clients of microfinance institutions committed suicide after being shamed by field officers who tried to collect payments of loans (Mader, 2013; Taylor, 2011), provides a powerful case of the impact of financialization to microfinance clients.

Factors influencing the borrower loan size in microfinance group lending: a survey from Indian microfinance institutions

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sunil Sangwan ◽  
Narayan Chandra Nayak
Keyword(s):  
Size Variation ◽  
Primary Data ◽  
Individual Member ◽  
Limited Information ◽  
Microfinance Institutions ◽  
Group Lending ◽  
Content Type ◽  
Loan Size ◽  
The Cost ◽  
The Impact

Purpose The purpose of this paper is to analyze the impact of the cost of microfinance intermediation on borrowers’ loan size. The identified transaction cost and credit risk factors tell about what a lender takes into accounts while screening and allocating loan amounts to the borrowers, where the lender has limited information about the client’s ability to repay. Design/methodology/approach The analysis is based on the primary data collected from a sample of 498 microfinance institutions (MFI) linked group clients covering two microfinance leading states of India. Findings Empirical findings suggest that the cost of microfinance intermediation has an impact on borrowers’ loan size. To reduce the cost, the MFIs lend big loans to clients having a high income, assets, land size, lower informal borrowings and having longer loan experiences. In MFI lending, the younger and less educated people are the ones who demand bigger loan amounts. The geographical distance of borrowers’ location from MFI offices, group size and interest rate are the other factors that influence the loan size. Originality/value The past empirical works seem to have not focused on how the cost of microfinance intermediation creates loan size variation among the borrowers in joint liability group lending. The endogeneity problem has not been resolved. The present article thus identifies the factors that influence the individual member loan size by using two-stage least squared regression to tackle the issue of endogeneity.

The role of elaboration likelihood routes in relationships between user-generated content and willingness to pay more

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bekir Bora Dedeoğlu ◽  
Anil Bilgihan ◽  
Ben Haobin Ye ◽  
Yajun Wang ◽  
Fevzi Okumus
Keyword(s):  
Decision Making ◽  
Social Media ◽  
Willingness To Pay ◽  
Structural Equation ◽  
Group Analysis ◽  
Equation Modeling ◽  
Moderating Effects ◽  
Content Type ◽  
Central Route ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of social media sharing on tourists’ willingness to pay more (WPM) at destinations. The moderating effects of tourists’ preferred route in decision-making or obtaining information (i.e. central or peripheral routes) were also examined. Design/methodology/approach A theoretical model was developed and tested using partial least squares structural equation modeling (PLS-SEM). Moderating effects of central and peripheral routes were tested using PLS multi-group analysis. Data were collected from 478 tourists in Antalya, Turkey, a sea, sun and sand tourist destination. Findings Findings indicate that importance attached to participant sharing (IPS) and importance attached to non-participant sharing (INPS) are significant antecedents of tourists’ WPM intentions. Moderating effects of tourists’ preferred route in decision-making reveal that the effect of IPS on WPM intention is more influential for those with high central route preferences than those with low central route preferences. While the effects of INPS and IPS on WPM intention is more determinative for those with higher peripheral route preferences. Practical implications Although it is known by the practitioners that consumer-generated contents are important, this research suggests and supports that these contents trigger tourists to pay higher prices. Originality/value How WPM is motivated by others’ social media sharing was not very clear in the literature. Therefore, this research gap was addressed in part by examining the social media sharing structure in terms of whether others posted on organization-related sites or on personal sites.

The impact of setting on wine tasting experiments

2019 ◽  
Vol 31 (4) ◽  
pp. 578-590
Author(s):  
Geoffrey Lewis ◽  
Steve Charters ◽  
Benoît Lecat ◽  
Tatiana Zalan ◽  
Marianna McGarry Wolf
Keyword(s):  
Willingness To Pay ◽  
Design Methodology ◽  
Subjective Assessment ◽  
Social Setting ◽  
Content Type ◽  
Wine Consumption ◽  
The Past ◽  
The Social ◽  
The Impact ◽  
The Relationship

Purpose Tasting experiments involving willingness to pay (WTP) have grown over the past few years; however, most of them occur in formal wine-tasting conditions, removed from real-world experience. This study aims to conduct experiments on wine appreciation and willingness to pay in both settings, to allow a comparison of how tasters reached conclusions in different situations. Design/methodology/approach The authors conducted two sets of experiments in Dijon, France, with knowledgeable wine drinkers, in 2014 and in 2016, to explore the relationship between wine ratings, WTP and objective characteristics (appellation, labelling and price). The first was in a formal wine-tasting setting (n = 58), and the second in the social setting of a restaurant (n = 52). The experiments involved deception: the tasters were presented with five wines, but in fact only three wines were involved, two of the wines being presented twice. Findings The results from the 2014 study showed that even with a group of experienced tasters, objective characteristics overwhelmed subjective assessment (taste, sensory perception) of the wine. Ratings and WTP were driven by the appellation or brand, labelling and price of the wines. The authors replicated the experiment in a social setting in 2016 which, contrary to their expectations, produced very similar results. In neither experiment did the experienced tasters detect the deception. Research limitations/implications The social setting was a lunch in a restaurant with a group of students who were graduating together. The tasting was conducted by some of their professors, which may have influenced the results and raises questions about whether the setting was truly ‘social’. The sample size for the experiments was comparatively small and further research, including novice and expert tasters, might contradict these findings, or at least add nuances to them. Originality/value The study finds that, contrary to expectations, in the social wine consumption setting of a restaurant meal enjoyed with colleagues, objective wine characteristics over-rode subjective appreciation of the wine.

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