Abstract
In this chapter, I review the links between conflict and microfinance usage. An overview of the mechanisms possibly accounting for microfinance use is introduced. A binary logistical regression of the natural experiment data collected shows a 260% increase in the likelihood to borrow from informal sources if the user has been personally affected by conflict. Reviewing qualitative evidence in turn, the argument that quicker access, low levels of trust in formal mechanism, and hyperbolic time discounting may be the primary mechanisms through which such decisions are made, points to greater demand-side changes than supply side changes.
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Notes
- 1.
Abhijit Banerjee, Dean Karlan, and Jonathan Zinman, 13.
- 2.
Geetha Nagarajan. Microfinance, youth and conflict: Emerging lessons and issues. USAID MicroNote, 4. Washington DC: USAID (2005).
- 3.
Abhijit Banerjee, Dean Karlan, and Jonathan Zinman, 17.
- 4.
David Laibson, 4.
- 5.
Ariel Rubinstein, “‘Economics and psychology’? The case of hyperbolic discounting”. International Economic Review 44, no. 4 (2003): 1207–1216, 1208.
- 6.
Ardener and Burman, 4–5.
- 7.
Humphreys, 13.
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Approximately one in ten approached members declined to participate.
- 9.
It can be noted that we are not seeking a random sample, but more a random treatment.
- 10.
It was also suggested by key interview informants that figures were consistently underreported on purpose in order to maintain confidence in ongoing military-political operations.
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Smith-Omomo, J. (2019). Social-Behavioural Changes. In: African Indigenous Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98011-9_7
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DOI: https://doi.org/10.1007/978-3-319-98011-9_7
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