How to assess pro-poor financial sector development
Ströh, Christiane

HaupttitelHow to assess pro-poor financial sector development
TitelzusatzA comprehensive framework applied to the case of Peruvian microfinance
TitelvarianteDie Evaluierung von armutsorientierter Finanzsystementwicklung
Zusatz zur TitelvarianteEin umfassender Analyseansatz, angewendet auf den Fall des Mikrofinanzwesens in Peru
AutorStröh, Christiane
Geburtsort: Stuttgart
GutachterProf. Dr. Manfred Nitsch
weitere GutachterProf. Dr. Barbara Fritz
Freie SchlagwörterMicrofinance; financial sector development; pro-poor development; financial access; impact
DDC330 Wirtschaft
332 Finanzwirtschaft
300 Sozialwissenschaften
ZusammenfassungMicrofinance has experienced increasing interest, both from public and private actors, often based on rather exaggerated expectations with regard to its developmental impact. A comprehensive framework is developed here for assessing recent changes that commercialization, new technologies and other financial market developments might mean to the poor at the regional and local levels, and applied to the case of microfinance in Peru. It is based on the review of theoretical and empirical findings as well as interviews on the relevance of financial services for the poor. The relevant dimensions, categories and indicators of outreach are identified and operationalized for assessing which kinds of financial services serve poor populations, create freedoms and opportunities and help them to cope with risks, without creating new ones. Based on Amartya Sen’s “Development as Freedom”, it is de facto access to reliable, diversified, cost-effective and tailor-made financial services which is defined as pro-poor financial sector development. The application of the framework shows that it is crucial to analyse different dimensions of outreach, namely scope, conditions and costs of financial services as well as breadth, depth and length of outreach. One financial institution might offer highly adequate products, but only in a limited geographic space, to a certain client group or at a very high price, whereas others offer cheap credit, but their service does not last long. One of the insights into pro-poor financial sector development in Peru, which has been quite positive in general terms during the last decade – is the importance of the broad scope of many different providers for attending the diversified financial management needs of (potential) microfinance clients.
InhaltsverzeichnisTable of Contents

Part A – Introduction
1 Setting the Stage: Trends in Microfinance, Focus of the Study, and State of the Art…1
1.1 Origins and recent tendencies in ‘finance for the poor‘, purpose and structure of the study…2
1.2 State of the art: Approaches related to pro-poor financial sector development…16
1.2.1 Defining and assessing financial sector development and access…16 Defining access and usage of financial services…16 Frameworks modelling financial sector development and the focus on pro-poor access…19 Recent studies assessing access to finance on pro-poor access…22
1.2.2 Frameworks assessing the impact and relevance of microfinance and related results…25
1.2.3 Evidence on demand-side characteristics and usage patterns of financial services by the poor…30
1.3 Research design and structure of the study…32
1.3.1 Research design, methodology and case selection…33
1.3.2 Data sources on access to finance and for the Peruvian case …39

Part B – Development of the Framework
2 Conceptualizing Poverty and Pro-Poor (Financial) Development: Sen’s Capability Approach…47
2.1 Poverty as lack of freedom: Definitions and dimensions of poverty by the poor…49
2.2 ‘Development as freedom’ and Sen’s understanding of poverty and pro-poor development…52
2.3 Links between Sen’s capability approach and the provision of financial services for the poor…58

3 Theoretical Approaches on the Relevance of Financial Services for the Poor
3.1 Financial functions, types of entrepreneurs and modes of production…62
3.1.1 Financial functions in the economic process…63
3.1.2 Schumpeter’s entrepreneur and his banker: The crucial role of the financial system…65
3.1.3 Structural heterogeneity and the importance of different modes of production…67
3.2 Finance and pro-poor economic development: Family-led economies and their needs for financial services…69
3.2.1 Characteristics of family-led economies…69
3.2.2 Family-led economies and their relation to financing…73
3.2.3 Life cycle and risk-related financial needs…78

4 Relevance of Financial Services for Poor Populations…84
4.1 The relevance of financial services for poor populations from a micro perspective…91
4.1.1 Usage patterns of financial instruments and strategies by low-income households and family-led businesses…92
4.1.2 Direct effects of financial services for family-led economies from a micro perspective…102 Consequences of the complex financial lives of the poor…102 Direct effects related to the use of informal financial services…104 Direct effects of the widespread focus on borrowing and the importance of regulation and consumer protecti-on…106 Direct effects in terms of access to additional services…109

4.2 The relevance of financial services for low-income population from an aggregated perspective…111
4.2.1 Direct effects of financial services for family-led economies…112 Access from an aggregated perspective: Availability of financial services across different groups and locations …112 Usage patterns and aggregated tendencies: Changing opportunities and risks…112 Scope and focus in service delivery…113 Financial resources circulating and the local economy…114 Changes in local financial markets…115
4.2.2 Indirect economic effects of financial services for family-led economies…117 The situation and development of local MSMEs…119 Labour market effects…122 Market dynamics, competition and cooperation in local markets…123 Strengthening individual MSMEs…125 Measures enhancing joint MSMEs’ performance and local development…127
4.2.3 Wider social effects of financial services for family-led economies…130 Dimensions and dynamics in social change…131 Human, cultural, and symbolic capital…134 Social capital: Bonding, bridging, and linking…135 Some underlying factors…137

5 The Comprehensive Pro-Poor Financial Sector Development Framework…141
5.1 The proposed pro-poor financial sector development approach: Framing relevant dimensions and categories…142
5.1.1 Sen’s capability approach and opportunities in pro-poor financial sector development…142
5.1.2 Porteous’ categories for grasping accessibility and appropriateness…143
5.1.3 Schreiner’s categories of outreach as a basis for the dimensions of pro-poor financial sector development…145
5.2 Dimensions, analytical categories and indicators of the comprehensive pro-poor financial sector development framework…148

Part C – Application of the Framework
6 The Pro-Poor Financial Sector Development Framework Applied to the Case of Peruvian Microfinance…165
6.1 Socioeconomic context, lines of marginalization, and the importance of family-led enterprises in Peru…166
6.1.1 Socioeconomic context and poverty…166
6.1.2 Employment situation and micro, small, and medium enterprises…170
6.2 Microfinance in Peru: A short introduction from supply and demand sides…174
6.2.1 Financial market and microfinance development…175
6.2.2 The demand-side: Usage of microfinance services …188
6.2.3 Products relevant to microfinance clients…194
6.3 Analyzing pro-poor financial sector development in Peru…200
6.3.1 Scope of outreach…201 Product diversity offered and related key characteristics…202 Scope of products for new, poor, and marginalized customers…213 Scope of products for different kinds of MSME clients…214 Product mix offered…217
6.3.2 Cost of outreach: Product-related cost of financial services offered…219
6.3.3 Breadth of outreach …237 Access points for microfinance clients…237 Market coverage among microfinance clients…243
6.3.4 Depth of outreach…251 Access points for poor populations…251 Market coverage among the poor…254
6.3.5 Length of outreach…258 Security of clients’ deposits and reliable service provision…259 Indebtedness of clients…260 Continuity of service provision…262
6.3.6 Different dimensions of outreach and insights into the value to clients, their families, and their communities…282

Part D – Conclusions
7 Insights into Pro-Poor Financial Sector Development and Research Gaps…293
7.1 Summary of the elaboration and application of the pro-poor financial sector development framework…293
7.2 Important findings and perspectives for pro-poor financial sector development…309


1.3-A Lists of institutions and experts, interview guide, workshop program and participants of research in Peru…359
4.1.1-A Overview of analyzed studies on usage patterns of financial devices…367
4.1.1-B Overview of studies about usage patterns and their main results…368
6.1.1-A Exchange rates for Peru (Peruvian currency – USD)…370
6.1.1-B Maps with socioeconomic indicators for Peru…371
6.2.1-A Overview of institutional changes and classification of these institutions in the present study…374
6.2.1-B The difference between real and nominal values in the analysed period…375
6.3.1-A Selection criteria for financial institutions for qualitative assessment…376
6.3.1-B Products, conditions, and costs of liquid savings, fixed-term savings, remittances, and insurance…382
6.3.1-C Overview of money transfer operators for international remittances, cost of transfer, and access points in Peru… 390
6.3.1-D Products and conditions of short- and long-term microenterprise loans, small consumption, and housing loans…392
6.3.1-E Microenterprise portfolio by economic sector and type of financial institution, absolute and relative in 2001 and 2008…404
6.3.1-F Number of microenterprise loans by economic sector and type of financial institution, absolute and relative in 2001 and 2008…405
6.3.2-A Overview of annualized total cost of borrowing and default cost rates …406
6.3.3-A Distribution of branches by type of financial institution, 2001 and 2008…407
6.3.3-B Financial institutions as unique suppliers in the respective district (única oferta bancaria, UOB), 2001 and 2008… 409
6.3.3-C Distribution of branches/population by type of financial institution, 2001 and 2008…410
6.3.3-D Distribution of ATMs and banking agents by type of financial institution, 2006 and 2008…413
6.3.3-E Distribution of banking agents/population by type of financial institutions, 2006 and 2008…414
6.3.3-F Shares of small deposits within total deposits by type of financial institution…415
6.3.4-A Maps with district balances assessing financial centralization and decentralization by type of financial institution, 2001 and 2008…416
6.3.5-A Overview of ratings on financial institutions, by financial institution and by rating agency, 1998-2008…418
6.3.5-B Location of headquarters and main businesses of the financial institutions, by type of financial institution and by bank, 2001 and 2008…419

Further Appendices according to the university’s requirements/Weitere Anhänge laut Prüfungsordnung…421
Summary in German/Zusammenfassung der Arbeit auf Deutsch…422

Falls Ihr Browser eine Datei nicht öffnen kann, die Datei zuerst herunterladen und dann öffnen.
SeitenzahlXXV, 428 S.
Fachbereich/EinrichtungFB Wirtschaftswissenschaft
Rechte Nutzungsbedingungen
Tag der Disputation16.07.2010
Erstellt am16.09.2010 - 07:21:25
Letzte Änderung18.08.2012 - 10:56:52
Statische URLhttp://www.diss.fu-berlin.de/diss/receive/FUDISS_thesis_000000019090