IDEAS home Printed from https://ideas.repec.org/a/rss/jnljms/v2i4p3.html
   My bibliography  Save this article

Why Should Microfinance Organizations Invest In Clients Business Training? Empirical Results from the Haitian Microfinance Industry

Author

Listed:
  • Bénédique Paul

Abstract

Despite many critics and mitigated effects, microfinance continues to grow all over the world, and equally in Haiti. Beyond rapid expansion, to really contribute to local economic development, microfinance organizations (MFOs) need to help micro entrepreneurs to better manage their businesses. However, practitioners consider investment in training activities as non-productive. With a national sample, we study, in this article, some supportive reasons why MFO’s should provide business training to borrowers, particularly in low-educated context like Haiti. According to our empirical findings, implementation of business training sessions reduces negative perception of interest rate, and improves borrowers’ satisfaction. Such induced socioeconomic change reduced clients drop out and foster MFOs sustainability.

Suggested Citation

  • Bénédique Paul, 2014. "Why Should Microfinance Organizations Invest In Clients Business Training? Empirical Results from the Haitian Microfinance Industry," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 2(4), pages 191-202.
    • Handle: RePEc:rss:jnljms:v2i4p3
    as

    Download full text from publisher

    File URL: http://rassweb.org/admin/pages/ResearchPapers/Paper%203_1497128890.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dean Karlan & Martin Valdivia, 2011. "Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 510-527, May.
    2. Geoffrey M. Hodgson & Thorbjørn Knudsen, 2008. "The Complex Evolution of a Simple Traffic Convention: the Functions and Implications of Habit," International Economic Association Series, in: János Kornai & László Mátyás & Gérard Roland (ed.), Institutional Change and Economic Behaviour, chapter 9, pages 178-199, Palgrave Macmillan.
    3. Dean Karlan & Jonathan Zinman, 2010. "Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts," The Review of Financial Studies, Society for Financial Studies, vol. 23(1), pages 433-464, January.
    4. Koen Rossel-Cambier, 2009. "La microfinance combinée : aperçu en Amérique latine et dans les Caraïbes," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(3), pages 85-97.
    5. Ahlin, Christian & Jiang, Neville, 2008. "Can micro-credit bring development?," Journal of Development Economics, Elsevier, vol. 86(1), pages 1-21, April.
    6. Marek HUDON & Tchakodo OURO‐KOURA, 2008. "Etude Des Facteurs Contingents Du Taux De Remboursement Au Sein D'Une Institution De, Microfinance: Le Cas Du Togo," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(2), pages 301-322, June.
    7. Besley, Timothy & Coate, Stephen, 1995. "Group lending, repayment incentives and social collateral," Journal of Development Economics, Elsevier, vol. 46(1), pages 1-18, February.
    8. Wennekers, Sander & van Stel, André & Carree, Martin & Thurik, Roy, 2010. "The Relationship between Entrepreneurship and Economic Development: Is It U-Shaped?," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 6(3), pages 167-237, July.
    9. Valentina Hartarska & Denis Nadolnyak, 2007. "Do regulated microfinance institutions achieve better sustainability and outreach? Cross-country evidence," Applied Economics, Taylor & Francis Journals, vol. 39(10), pages 1207-1222.
    10. Paul Mosley & Linda Mayoux, 1999. "Questioning virtuous spirals: micro-finance and women's empowerment in Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(7), pages 957-984.
    11. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    12. Marek Hudon, 2008. "Norms and values of the various microfinance institutions," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 35(1/2), pages 35-48, January.
    13. Ostrom, Elinor, 2009. "An Agenda for the Study of Institutions," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 89-110, December.
    14. Marek Hudon, 2008. "Norms and values of the various microfinance institutions," ULB Institutional Repository 2013/14208, ULB -- Universite Libre de Bruxelles.
    15. Beatriz Armendáriz & Jonathan Morduch, 2010. "The Economics of Microfinance, Second Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262014106, April.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    17. Johannes W. Fedderke & John M. Luiz, 2008. "Does human capital generate social and institutional capital? Exploring evidence from South African time series data," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 649-682, October.
    18. Esperanza Vera-Toscano & Victoria Ateca-Amestoy & Rafael Serrano-Del-Rosal, 2006. "Building Financial Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 77(2), pages 211-243, June.
    19. Rahman, Aminur, 1999. "Micro-credit initiatives for equitable and sustainable development: Who pays?," World Development, Elsevier, vol. 27(1), pages 67-82, January.
    20. Kabeer, Naila, 2001. "Conflicts Over Credit: Re-Evaluating the Empowerment Potential of Loans to Women in Rural Bangladesh," World Development, Elsevier, vol. 29(1), pages 63-84, January.
    21. Paul, Bénédique, 2009. "Reclaiming Institutions as a Form of Capital," MPRA Paper 39017, University Library of Munich, Germany.
    22. Dominique Gentil & Jean-Michel Servet, 2002. "Entre « localisme » et mondialisation : la microfinance comme révélateur et comme levier de changements socio-économiques," Revue Tiers Monde, Programme National Persée, vol. 43(172), pages 737-760.
    23. -, 1986. "Agenda = Agenda," Series Históricas 8749, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul, Bénédique & Garrabé, Michel, 2011. "Le capital institutionnel dans l'analyse du développement : Prolongement théorique et premier test empirique [Institutional Capital in Economic Development Analysis: Theoretical Continuation and Fi," MPRA Paper 39016, University Library of Munich, Germany.
    2. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    3. Simon Zaby, 2019. "Science Mapping of the Global Knowledge Base on Microfinance: Influential Authors and Documents, 1989–2019," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    4. Prof dr Erik Stam & Felix Meier zu Selhausen, MSc MA, 2014. "Husbands and Wives. The powers and perils of participation in a microfinance cooperative for female entrepreneurs," Working Papers 2014/20, Maastricht School of Management.
    5. Islam, Asadul & Nguyen, Chau & Smyth, Russell, 2015. "Does microfinance change informal lending in village economies? Evidence from Bangladesh," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 141-156.
    6. João Paulo Coelho Ribeiro & Fábio Duarte & Ana Paula Matias Gama, 2022. "Does microfinance foster the development of its clients? A bibliometric analysis and systematic literature review," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-35, December.
    7. Dilruba Khanam & Muhammad Mohiuddin & Asadul Hoque & Olaf Weber, 2018. "Financing micro-entrepreneurs for poverty alleviation: a performance analysis of microfinance services offered by BRAC, ASA, and Proshika from Bangladesh," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 8(1), pages 1-17, December.
    8. Berns, John P. & Shahriar, Abu Zafar M. & Unda, Luisa A., 2021. "Delegated monitoring in crowdfunded microfinance: Evidence from Kiva," Journal of Corporate Finance, Elsevier, vol. 66(C).
    9. Jessica Schicks, 2013. "From a Supply Gap to a Demand Gap? The Risk and Consequences of Over-indebting the Underbanked," Palgrave Macmillan Books, in: Jean-Pierre Gueyie & Ronny Manos & Jacob Yaron (ed.), Microfinance in Developing Countries, chapter 8, pages 152-177, Palgrave Macmillan.
    10. Touseef Ahmed Khan & Fahem Ahmed Khan & Qristin Violinda & Ilyas Aasir & Sun Jian, 2020. "Microfinance Facility for Rural Women Entrepreneurs in Pakistan: An Empirical Analysis," Agriculture, MDPI, vol. 10(3), pages 1-17, February.
    11. Namizata Binaté Fofana & Gerrit Antonides & Anke Niehof & Johan Ophem, 2015. "How microfinance empowers women in Côte d’Ivoire," Review of Economics of the Household, Springer, vol. 13(4), pages 1023-1041, December.
    12. Meier zu Selhausen, Felix, 2016. "Women's empowerment in Uganda: colonial roots and contemporary efforts, 1894-2012," Economics PhD Theses 0715, Department of Economics, University of Sussex Business School.
    13. de Quidt, Jonathan & Fetzer, Thiemo & Ghatak, Maitreesh, 2018. "Commercialization and the decline of joint liability microcredit," Journal of Development Economics, Elsevier, vol. 134(C), pages 209-225.
    14. Francisco J Buera & Joseph P Kaboski & Yongseok Shin, 2021. "The Macroeconomics of Microfinance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 126-161.
    15. de Quidt, Jonathan & Fetzer, Thiemo & Ghatak, Maitreesh, 2016. "Group lending without joint liability," Journal of Development Economics, Elsevier, vol. 121(C), pages 217-236.
    16. Dan Brockington & Nicola Banks, 2014. "Exploring the Success of BRAC Tanzania’s Microcredit Programme," Global Development Institute Working Paper Series 20214, GDI, The University of Manchester.
    17. Donatien Eze Eze, 2019. "Microfinance programs and domestic violence in northern Cameroon; the case of the Familial Rural Income Improvement Program," Review of Economics of the Household, Springer, vol. 17(3), pages 947-967, September.
    18. Habimana, Dominique & Haughton, Jonathan, 2022. "Does Rwanda’s flagship microcredit programme boost agriculture and incomes?," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 17(3), September.
    19. Karaivanov, Alexander & Kessler, Anke, 2018. "(Dis)advantages of informal loans – Theory and evidence," European Economic Review, Elsevier, vol. 102(C), pages 100-128.
    20. B, Ranjula & Wallentin, Fan Yang, 2008. "Economic or Non-Economic Factors – What Empowers Women?," Working Paper Series 2008:11, Uppsala University, Department of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rss:jnljms:v2i4p3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Danish Khalil (email available below). General contact details of provider: http://www.rassweb.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.