December 6, 2013
New & NoteworthyBy Alicia Brindisi
What was new and noteworthy this week seems to be cash transfer news (or maybe debate fodder is more accurate). In addition, New York released a new report on immigrants and financial services and bloggers go head-to-head on the value of microbanks.
Recently, Nathan Fiala, a postdoctoral fellow at the German Institute for Economic Research, wrote a guest post for the World Bank Development Impact blog on his recent job market paper evaluating the impact of various combinations of grants, loans, and business trainings on business owners. His results show some impact on profits for men who received loans and training but no effects for women. The evidence indicates that women have a much harder time protecting cash from family demands and therefore have a harder time investing in their businesses, while male entrepreneurs benefit from having family nearby to use as labor in their enterprises.
ICT Works has a nice summary of the recent Technology Salon in Washington on mobile cash grants while Humanosphere posted the live tweets from the complementary New York event.
In more cash transfer news, Dr. Stephanie Levy of the London School of Economics and Professor Sherman Robinson designed a macroeconomic model of the Cambodian economy in order to simulate the impact of various social policies, including transfers. They research duo’s results show that cash transfer policies alone did not result in an increase in real GDP, even when up to 4% of the gross domestic product is distributed to households. However, the model showed a link between transfers and agricultural investment.
New York City released the results of its Immigrant Financial Services Study, which finds that regardless of income levels or bank status, immigrants are saving but misperceptions and uncertainty about the process of opening accounts are hindering access to formal financial services.
- “Microbanks: Good or bad?” That was the topic of an internet debate between Slate's economic and business blogger, Matthew Yglesias, and American Banker’s Rob Blackwell. But they weren’t discussing microfinance—instead they were discussing the size of banks in the United States where decades of consolidation have made very large banks the norm. Yglesias feels small banks are difficult to regulate and cannot compete with larger institutions. Blackwell argues small banks are profitable, competitive, and vital to financial inclusion.