مدیریت ریسک فعال و شرایط قرارداد وام : مدارک و شواهد از موسسات تامین مالی خرد رتبه بندی شده
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|790||2012||11 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : The Quarterly Review of Economics and Finance, Volume 52, Issue 4, November 2012, Pages 427–437
The aim of this article is to test the relationship among organizational architecture, joint liabilities contracts, and loan conditions. Based on a sample of 135 MFIs rated between 2003 and 2008, the study shows that solidarity lending and a decentralized credit decision have no significant influence on loan conditions. Being a village bank lender is significantly associated with higher interest rates charged, higher outreach, lower depth of outreach, and higher transaction costs. Results seem to highlight the existence of a trade-off between outreach and the average loan size per borrower when MFIs decentralize credit decisions or establish joint liability contracts.
Microcredit is no longer an experiment. It has been shown as being one of the most efficient instruments of economic development (Van Maanen, 2005). Through the provision of responsive and specific financial services, microfinance institutions (MFIs) allow the financial inclusion of poor entrepreneurs who, for economic reasons, are excluded from the traditional banking system. Microfinance practitioners1 recognize that there can be no sustainable performance without sound risk management. The financial literature on risk management considers risk management strategies to be financial decisions, that is, those that create value (Froot et al., 1993 and Froot and Stein, 1998). Risk management therefore becomes one of the major determinants of MFI efficiency and sustainability. Because capital allocation or lending is one of the core activities of microfinance, MFIs should be able to mitigate information asymmetries that arise from lending. Information asymmetries lead to market imperfection. Microfinance credit market imperfections can be explained by the difficulties that MFIs experience in selecting borrowers (adverse selection) and controlling their behavior (moral hazard) (Stiglitz & Weiss, 1981). MFIs target mainly micro and small enterprises (MSEs) and promoters of income-generating activities (IGA) (Van Maanen, 2005) that are reputed to be informationally opaque. The financial information provided by these MFI clients are neither audited nor certified by accounting firms. Therefore, “hard” information available or disclosed by MFI clients is not sufficient to estimate accurately the likelihood of borrowers defaulting or enable MFIs to exercise direct control over their behavior. Consequently, hard information seems to be less reliable and less relevant. Loan contract terms such as interest rates charged, the amount of the loan, and collateral requirements can contribute to addressing the information problem faced by MFIs. According to Stiglitz and Weiss (1981), these devices lead to credit rationing and encourage MFIs to limit access to credit. Choosing this option seems contradictory with the social mission of microfinance. The low quality of hard information leads MFIs therefore to set up innovative screening devices in order to reduce agency conflicts between them and their clients and to allow borrowers to undertake actions that converge with their interests. Those devices rely mainly on “soft” or local information, which is less costly for local moneylenders in microfinance credit market (Stiglitz, 1990). Because of geographical proximity and social and cultural ties, rural populations have an informational advantage over the institution in terms of selection (risk of adverse selection) and monitoring of borrowers (moral hazard). According to Stiglitz (1990), it seems necessary to delegate the credit decision to people who have a better access to this local information. The MFI thus transfers the selection and control of groups of borrowers and delegates the credit decision to the loan officer. Organizational architecture and joint liability contracts appear to be soft lending technologies that can help MFIs to address information asymmetry problems in lending. The group credit contract, experienced by the Grameen Bank and BancoSol, is considered one of the major innovations in microfinance. Theoretical studies (Armendariz de Aghion, 1999, Armendariz de Aghion and Morduch, 2000, Besley and Coate, 1995, Chowdhury, 2005, Ghatak, 1999, Ghatak, 2000 and Stiglitz, 1990) highlight conditions under which joint liability contracts can efficiently mitigate information asymmetries in microfinance lending. Empirical studies investigate the main efficiency drivers of joint liability contracts in groups of borrowers on the one hand (Ahlin and Townsend, 2007, Cassar et al., 2007, Karlan, 2007, Paxton et al., 2000, Sharma and Zeller, 1997, Wenner, 1995 and Zeller, 1998) and the influence of loan contract terms (interest rate, credit availability) and joint liability contract on portfolio quality, financial, and social efficiency of MFIs on the other hand (Cull, Demirgüç-Kunt, & Morduch, 2007). However, very little attention has been paid to the study of the relationship between joint liability contracts and loan contract terms, namely, interest rates and transaction costs and the average amounts of loans. Moreover, a strand of banking literature (Berger and Udell, 1995, Berger et al., 2001, Degryse and Van Cayseele, 2000, Diamond, 1984 and Petersen and Rajan, 1994) and most recently the Behr, Entzian, and Güttler (2011) research in microfinance document that relationship lending helps to overcome information asymmetries and, consequently, influences loan conditions. Another strand of the banking literature in developed countries (Berger and Black, 2011, Berger and Udell, 2002, Berger et al., 2005, Brickley et al., 2003 and Stein, 2002) considers the decentralization of the credit decision as an organizational consequence of relationship lending and investigates the determinants of the choice of the decentralization and its effects on the availability of credit. Empirical literature on this issue seems to be scarce and the relationship between organizational architecture and loan contract terms remains largely unexplored in microfinance. With these considerations in mind, the aim of this article is to study the relationship among organizational architecture, joint liability contracts, and loan contract terms in microfinance organizations. To the best of our knowledge this is the first study answering the question whether setting up joint liability contracts and decentralizing credit decisions lead MFIs to reduce interest rates and transaction costs, thereby offering more loans in number and size. This study goes beyond the literature on the effectiveness of risk management practices in many ways. Unlike Cull et al. (2007), who studied the interaction effect of joint liability contracts and interest rates on MFI financial efficiency, this article focuses on the impact of group-lending contracts on loan conditions. Furthermore, concerning the organizational architecture, we extend Behr et al.’s (2011) research by answering the question whether a decentralized credit decision, or more precisely the association between information production and capital allocation resulting from the relational approach, influences loan conditions. Moreover, contrary to Behr et al. (2011), who use a dataset of loan applications provided by one MFI in Mozambique, the empirical analysis is based on a sample of 135 microfinance institutions rated between 2003 and 2008. We provide evidence that solidarity lending and credit-decision decentralization have no significant influence on loan conditions. Being a village bank lender is significantly associated with higher transaction costs and higher interest rates charged. Results lead to the conclusion that a trade-off seems to exist between the number and the loan size when MFIs set up joint liability contacts or when credit decisions are decentralized. The remainder of the article is organized as follows: Section 2 describes the conceptual framework of the research, Section 3 describes the data and the methodology, and Section 4 presents empirical results.
نتیجه گیری انگلیسی
The object of this study is to empirically verify the existence of a relationship among organizational architecture, joint liability contracts, and loan contract terms in microfinance organizations. To this end, we have mobilized the theoretical and empirical literature on credit agreements and organizational architecture on the one hand and used a panel data analysis on the other hand. Using a sample of 135 rated MFIs, the results show that although the group lending contracts and organizational architecture can minimize the risk of information asymmetry in MFIs, setting up these devices does not improve credit availability and is not associated with lower interest rates charged. Village bank lenders face higher agency and lending costs and are charge higher interest rates than non-village bank lenders. In this research, attention has been paid to one of the pillars of organizational architecture, namely, the delegation. However, according to the general literature on organizational architecture (Brickley et al., 2003, Fama and Jensen, 1983a and Jensen and Meckling, 1992) and the models of Stein (2002) and Berger and Udell (2002), a decentralized credit decision induces agency conflict between the loan officer and the organization. As argued by Brickley et al. (2003), an efficient organizational architecture is an organizational design that not only allocates decision authority to individuals who hold relevant information, but also ensures that decision makers are subject to appropriate incentive schemes to make decisions that create value. Thus, it appears necessary to extend this research by attempting to answer the question whether MFIs’ organizational architecture is efficient and if efficient organizational architecture modify loan contract terms and lead to financial and social efficiency of MFIs.