Oil Price Shock and its Impact on the Macroeconomic Variables of Pakistan: A Structural Vector Autoregressive Approach
In: Malik, K.Z, Ajmal H, Zahid M U.,"International Journal of Energy Economics and Policy", 2017, 7(5), 83-92
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In: Malik, K.Z, Ajmal H, Zahid M U.,"International Journal of Energy Economics and Policy", 2017, 7(5), 83-92
SSRN
In: American economic review, Band 114, Heft 2, S. 534-574
ISSN: 1944-7981
We run a field experiment offering graduated microcredit clients the opportunity to finance a business asset worth four times their usual borrowing limit. We implement this using a hire-purchase contract; our control group is offered a zero interest loan at the usual borrowing limit. We find large, significant, and persistent effects: treated microenterprise owners run larger businesses with higher profits; consequently, household consumption increases, particularly on food and children's education. A dynamic structural model with nonconvex capital adjustment costs rationalizes our results and allows counterfactual analysis; this highlights the potential for welfare improvements through large capital injections that are financially sustainable. (JEL C93, D22, G21, G32, L25, O14, O16)
In: CEPR Discussion Paper No. DP15768
SSRN
Working paper
In: Oxford review of economic policy, Band 36, Heft Supplement_1, S. S138-S168
ISSN: 1460-2121
AbstractThe COVID-19 pandemic threatens lives and livelihoods, and, with that, has created immediate challenges for institutions that serve affected communities. We focus on implications for local microfinance institutions in Pakistan, a country with a mature microfinance sector, serving a large number of households. The institutions serve populations poorly-served by traditional commercial banks, helping customers invest in microenterprises, save, and maintain liquidity. We report results from 'rapid response' phone surveys of about 1,000 microenterprise owners, a survey of about 200 microfinance loan officers, and interviews with regulators and senior representatives of microfinance institutions. We ran these surveys starting about a week after the country went into lockdown to prevent the spread of the novel coronavirus. We find that, on average, week-on-week sales and household income both fell by about 90 per cent. Households' primary immediate concern in early April became how to secure food. As a result, 70 per cent of the sample of current microfinance borrowers reported that they could not repay their loans; loan officers anticipated a repayment rate of just 34 per cent in April 2020. We build from the results to argue that COVID-19 represents a crisis for microfinance in low-income communities. It is also a chance to consider the future of microfinance, and we suggest insights for policy reform.
In: Oxford Review of Economic Policy, Forthcoming
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Working paper