Robert Lensink

University of Groningen | RUG · Department of Economics, Econometrics and Finance

Background Micro‐, small‐, and medium‐sized enterprises (MSMEs) account for the vast majority of firms in most economies, particularly in developing nations, and are key contributors to job creation and global economic development. However, the most significant impediment to MSME development in low‐ and middle‐income countries is a lack of access t...

We implement a randomized field experiment in Pakistan to evaluate three interventions designed to encourage poor Muslim women to open and use Islamic savings accounts. First, an intervention that increases religious salience by using a religious speech that highlights the purposes, benefits, and desirability of savings and dispels the misconceptio...

Financial inclusion is identified as a driver of sustainable development and a necessary condition for social and economic development. Yet, most people in developing countries face numerous constraints and barriers that exclude them from the financial system. The recent fintech developments and their ability to reduce these constraints promise to...

In recent years, academic and policy research has placed increasing focus on the study of the attitudes of the Muslim poor towards Islamic and non-Islamic (micro-)finance to inform financial inclusion strategies. Survey questions are a common way to measure these attitudes and have been included into large-scale surveys such as the Global Findex. H...

This study evaluates the effect of social capital on farmers’ adoption of subsidized seedlings and fertilizer for cocoa farmers in Ghana. We distinguish three types of social capital: network social capital, relationship social capital, and community social capital. Network social capital refers to the peer-to-peer information flow about product be...

Development economics has increasingly studied the role of diminished aspirations and other internal constraints that may form poverty traps. We present results from a controlled experiment to develop aspirational hope among 531 dairy farmers in Bolivia. Subjects in the treatment group participated in three coaching sessions that involved watching...

How does agricultural insurance affect the modernization of farming in low income countries? We focus on institutional contexts without formal contract enforcement, where smallholders cannot access modern inputs via markets. Instead, farmers can engage in relational contracting with traders to sell their crop and gain access to inputs (as an advanc...

The Triadic Comparison of Technologies (tricot) approach is a citizen science methodology with a high potential to improve the development of context specific crop varieties and accelerate their adoption among smallholder farmers. We evaluated this methodology with 200 tribal farmers from the Adilabad District (Telangana, India) to select dual-purp...

We test whether stating the possibility of winning an unspecified prize (announcing undefined lottery prizes, AULP, henceforth) in the subject line of a survey invitation email increases contact and response rates. As adherence to Muslim cultural norms and Islamic religious values might negatively affect the response to lottery-style prize assignme...

Taking a detailed tour through the emerging economic field of financial inclusion, this timely book charts the subtle conceptual shifts that gave rise to the focus on inclusivity in development finance, and provides an overview of key concepts, issues, and empirical findings. Diving into the crucial interaction of financial inclusion with gender, f...

We use a randomised field experiment to study short-term and medium-term impacts of a training intervention that aims to increase employability of Rwandan (underemployed) youths. The training includes networking and mentorship as well as modules on developing entrepreneurship, technical skills and soft social skills. We evaluate intended outcomes o...

Gender discrimination and associated social norms are important contributing factors to the high frequency of women trapped in poverty – particularly in developing countries. Financial inclusion, especially access to formal saving services, has recently received much attention from the development community for its potential to lift women out of po...

Purpose This research seeks to assess the impact of a credit-linked insurance bundle in Zambia, in terms of the inputs used and the amount of maize subsequently produced and sold. Design/methodology/approach To estimate the impact of a credit-linked insurance bundle, this research relies on a natural field experiment. A cross-sectional survey, con...

Microfinance institutions traditionally focus on the provision of credit and other financial services. In light of recent evidence on the scant transformative effects of ‘standard’ microcredit models, however, some lenders are increasing efforts to offer additional non-financial services – such as business trainings and technical assistance. While...

This paper investigates the drivers of provisioning in MFIs and their provisioning behaviour over the business cycle. Based on an international sample of MFIs extracted from the MIX database over the 2001–2014 period, we uncover a negative relationship between MFIs' provisioning and the business cycle. Our finding corroborates the fact that MFIs do...

br/> Many microfinance institutions (MFIs) use dynamic incentives in combination with progressive lending schemes to reduce defaults. However, the specific role of progressive lending has never been tested empirically, while observational evidence in other contexts points to potentially adverse effects. Using an experimental approach, we study the...

This article reviews developments in the Stock Trading Centre (STC) in Ho Chi Minh City, Vietnam, the main stock market in the country, since its start in 2000. It presents information about developments in the number of stocks traded, trading activity and stock-price developments. This article focuses on the question whether the market is weak-for...

Conventional microfinance institutions (MFIs) can promote financial inclusion, but they also prompt ethical concerns regarding the social consequences of commercialization and high interest rates. Islamic MFIs, which adhere to Sharia’s prohibition of riba (usually interpreted as a ban on interest), present an alternative. Differences between conven...

Intimate partner violence is an important global health problem that remains ill understood. Several studies have documented that female empowerment may increase violence against women—the so‐called “male backlash.” We propose a utilitarian explanation for this phenomenon, based on the assumption that violence may be used as an instrument to affect...

Index‐based insurance offers a climate risk management strategy that can benefit the poor. This article focuses on whether adopting index insurance improves access to financial markets and reduces credit rationing, using empirical analyses focused on Ethiopia. With different identification strategies, including a newly developed method that leverag...

The experimental approach has revolutionized development economics. Nonetheless, randomization cannot do everything. We discuss challenges to RCTs, paying special attention to internal validity. Randomized interventions in social sciences are not double-blind and do not, in general, hold all relevant covariates constant. Treated and untreated subje...

Using data from a large household survey among 8,438 households in China in 2011, we analyse whether the fact that a household head is a member of a political party in China increases the probability that the household has access to a bank loan. We investigate how these connections influence the decision of households to apply for a bank loan (i.e....

Research has mainly studied women’s empowerment assessing personal (e.g., self‐esteem) or relational (e.g., decision‐making) empowerment indicators. Women are not isolated individuals; they are embedded in social relationships. This is especially relevant in more collectivist societies. The current research provides a relational perspective on how...

Index-based insurance (IBI) is an innovative pro-poor climate risk management strategy that suffers from low uptake. Evidence on the role of behavioral impediments in adoption of IBI is scant. We conducted lab-in-the-field experiments with 1139 smallholders out of whom 596 have adopted IBI in Ethiopia to elicit their risk and ambiguity aversion beh...

p>We use a randomised experiment in Kenya to analyse how smallholder farmers respond to receiving a free hybrid crop insurance product, conditional on purchasing certified seeds. We find that farmers increase effort—increasing total investments and taking more land in production. In addition to adopting more certified seeds, they also invest more i...

Intimate partner violence is an important global health problem that policy makers seek to address by a variety of interventions, including efforts to promote “women's empowerment.” We use data from a randomized control trial in Vietnam and find that this strategy may backfire: women who participated in a gender and entrepreneurship training progra...

Offering women access to microcredit and business training is a prominent approach to stimulate women's empowerment. Whereas men seem to profit from business training, women do not. We adjusted a goal‐setting training session on the basis of women's needs in collaboration with a women organization in Sri Lanka. We invited female microfinance borrow...

Across the world the Gender and Entrepreneurship Together (GET Ahead) training originally developed by the International Labour Organization has been implemented to improve business outcomes and enhance women’s empowerment. This randomized controlled trial is the first rigorous attempt to examine the impact of the GET Ahead training on women’s empo...

We use a randomized controlled trial and behavioral game to study the extent and determinants of income hiding in rural Vietnam. We focus on a training program that aims to promote gender equality and entrepreneurship among women in poverty who are engaged in running a small business. In one treatment arm, we allow husbands to participate in the tr...

Women’s empowerment is an important goal in achieving sustainable development worldwide. Offering access to microfinance services to women is one way to increase women’s empowerment. However, empirical evidence provides mixed results with respect to its effectiveness. We reviewed previous research on the impact of microfinance services on different...

This research note examines the relevance of microfinance as a means to cope with natural disasters, using the event of the cyclone Phailin, which struck India in 2013. The results indicate that microfinance helps reduce the negative effects of extreme weather-related shocks. In light of the somewhat disappointing outcomes suggested by several rece...

In this study, using the Becker–DeGroot–Marschak mechanism, we assess the Willingness to Pay for water filters and solar lamps in Indonesia. The study shows that credit constraints are important determinants of the low levels of WTP and low adoption rates of preventative health technologies. Providing women with an option to spread out the payments...

This article examines the impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of microfinance institutions (MFIs). Using a global data set of MFIs in 77 countries, we find that the provision of nonfinancial services does not harm nor improve MFIs’ financial sustainability and effici...

Background: Saving plays a crucial role in the process of economic growth. However, one main reason why poor people often do not save is that they lack financial knowledge. Improving the savings culture of children through financial education is a promising way to develop savings attitudes and behavior early in life. Objectives: This study is on...

We use a randomized control trial to evaluate the impact of a business training for female clients of a microfinance institution in northern Vietnam, and we consider the impact on (i) business knowledge, (ii) practices, and (ii) outcomes, as well as (iv) firm entry and exit decisions. In addition, we vary the nature of the intervention by inviting...

Trade credit is a major source of finance in value chains in developed and emerging economies. Despite its ubiquitous use, this is one of the first empirical studies that analyzes why the use of trade credit varies along the value chain. We argue that competition faced by firms at different stages in the value chain and enforcement mechanisms that...

We combine an RCT and a lab-in-the-field experiment to explore how participating in an ‘entrepreneurship and gender’ training affects the intra-household bargaining position of women. While male preferences dominate household decisions, the training attenuates the bargaining gap considerably. Inviting husbands to participate in the training does no...

Purpose – The purpose of this paper is to review the most recent scientific literature on the determinants explaining the demand for index-insurance, the impact of index-insurance and the existing links between insurance and credit. In this meta-analysis, the authors identify key discoveries on the potential of index-insurance in enhancing credit...

This article conducts a series of list experiments to detect whether community conversations contribute to a change in thinking about harmful traditional practices in Ethiopia. While our findings are mixed, we provide evidence that community conversations are indeed a valuable instrument to induce a change in social values in order to empower women...

This article makes both a theoretical and an empirical contribution to the literature on financial liberalization and income inequality. In the first part, we develop a tractable model that features agents with varying investment abilities and a banking sector. There are two possible interventions to liberalize the banking sector: first, a reductio...

This article uses a mixed method approach to assess the impact of a microfinance organisation in Ghana. By combining propensity score matching with a double-difference method, the authors determine that microcredit has a positive effect on expenditures but does not positively affect a series of other outcome variables. A list experiment further sug...

This study examines the impact of loan officer characteristics on repayment rates of microfinance borrowers in Mexico applying multilevel analyses, with special attention to the impact of the gender of the loan officer on default rates. The results strongly suggest that loan officers play a crucial role in improving repayment rates in microfinance...

This study examines whether membership in a savings and credit society (SACP) reduces vulnerability to poverty, using a representative survey from the National Savings and Financial Services Bank. The sample of households includes those that are and are not members of a SACP during 2004−2007. This evidence indicates that membership improves income;...

This article examines a randomised intervention in Delhi, India, that provided unconditional cash transfers to a group of households as a replacement for the food security offered by a below-poverty-level card. The experimental approach can differentiate beneficial effects due to either unconditional cash transfers or newly opened bank accounts. Th...

Most small businesses in the developing economies suffer from a lack of access to formal external finance. One important alternative source of finance for these entrepreneurs is trade credit. Applying a unique data-set containing data on specific trade relations between rice wholesalers and rice retailers in Tanzania, we analyse the determinants of...

This report documents the assessment for the joint MFS II evaluations of development interventions in Ethiopia. The assessment of the development intervention combines qualitative and quantitative methods as required by NWO (2011) and consists of three pillars. 1) An evaluation of the millennium development goals (MDGs) of projects financed through...

African farmers are mainly smallholder farmers which tend to be severely constrained in investing in productivity-enhancing technology. This, in turn, can be partly attributed to inherent risks smallholder farmers in Africa face. Farm risks are prevalent at every stage of the agricultural value chain – from production to postharvest storage, proces...

During the past decades, African countries experienced considerable capital flight. Since the 1990s, most countries reformed their domestic financial markets in an attempt to improve the functioning of their domestic financial systems and to increase the efficiency of resource allocation—that is, to enhance financial development. This chapter exami...

We organise a field experiment with smallholder farmers in Rwanda to measure the impact of financial literacy training on financial knowledge and behaviour. The training increased financial literacy of participants, changed their savings and borrowing behaviour, and had a positive effect on new business start-up. However, it failed to have a signif...

This paper shows that an asymmetric group debt contract, where one borrower co-signs for another, but not vice versa, leads to heterogeneous matching. The analysis suggests that micro finance organizations can achieve the first best by offering asymmetric group contracts.

Although Africa’s indigenous systems of slavery have been extensively described in the historical literature, comparatively little attention has been paid to analyzing its long term impact on economic and political development. Based on data collected from anthropological records we conduct an econometric analysis. We find that indigenous slavery i...

In the past decade, non-governmental organizations have been increasingly pressed to demonstrate whether their projects and programs are effective and contribute to enhancing the well-being of their beneficiaries. Although monitoring and evaluation have always been part of aid policies, most traditional evaluation methods come in for criticism beca...

This study provides a systematic analysis of the empirical literature on the relationship between financial liberalization and economic growth by conducting a meta-analysis, based on 441 t-statistics reported in 60 empirical studies. We focus on explaining the heterogeneity of results in our sample in terms of study-, data- and method-specific char...

Experts report on the latest research on extending access to financial services to the 2.5 billion adults around the world who lack it. About 2.5 billion adults, just over half the world's adult population, lack bank accounts. If we are to realize the goal of extending banking and other financial services to this vast “unbanked” population, we need...

This paper shows that positive correlation between project outcomes may improve the efficiency of microfinance group lending contracts.

This paper examines a randomized intervention in Delhi, India, that provided unconditional cash transfer to a group of households as a replacement for food security by means of a below poverty line card. A special feature of our study is that our experiment allows to differentiate between beneficial effects due to unconditional cash transfers and t...

Using panel data from a survey conducted in 2006 and 2008 of 177 market-oriented farmers in central Chile, we investigate investment under imperfect capital markets. Specifically we determine the impact of formal credit constraints on fixed investment. By controlling for endogeneity problems, we find credit constraints to have a significant negativ...

By using stochastic frontier analysis, this article examines the technical efficiency of different types of microfinance institutions in Latin America. In particular, it tests whether differences in technical efficiency, both intra- and interfirm, can be explained by differences in ownership. With a focus on non-governmental organizations, cooperat...

We use a series of field experiments in rural Burundi to examine the impact of exposure to conflict on social, risk, and time preferences. We find that conflict affects behavior: individuals exposed to violence display more altruistic behavior towards their neighbors, are more risk-seeking, and have higher discount rates. Large adverse shocks can t...

This study investigates the impact of financial advisors on portfolio returns, risk, trading, and diversification using a large data set of individual Dutch equity investors, with random assignment to specific advisors. We confirm recent experimental results on the benefits of advisory interventions that control for moral hazard behavior and endoge...

We use primary survey data to analyse the relationship between trade credit and customer switching in the context of trade transactions between wholesalers and retailers in the Tanzanian rice market. Results reveal a negative relation of trade credit and customer switching, that is, trade credit acts as a switching barrier; retailers are reluctant...

abstractRecently, microfinance has been coming under public and media attacks. The microcredit crisis following from microfinance-induced suicides in 2010 in the Indian state of Andhra Pradesh indicates that weak corporate governance and imprudent risk taking have far-reaching consequences. Yet, analyses of corporate governance mechanisms among mic...

This study examines the impact of microcredit on household self-employment profits in Vietnam. For two indicators of credit participation - a dichotomous participation dummy and the accumulated amount of microcredit received per household - the analysis reveals a positive effect on household profits. The analysis also reveals that an instrumental v...

The objective of this paper is to analyze the factors that determine productivity of fruit and vegetable growers in central Chile, focusing especially on the effect of short-term credit on farm productivity for market-oriented farmers. We explicitly test for possible selection bias using a panel data set from a survey conducted in 2006 and 2008 wit...

Using data from two surveys conducted in 2006 and 2008 with 177 farmers, this article determines whether market-oriented farmers in central Chile are credit constrained, and it identifies the main factors that influence formal credit provision. In so doing, this study explicitly tests whether social capital variables play a role in determining cred...

Using a panel of Dutch listed firms this paper provides empirical evidence for the hypothesis that more risky firms are confronted with more severe capital market constraints than relatively less risky firms. The paper also contributes to the discussion on the usefulness of cash flow as a measure of financial constraints. We present a stochastic ve...

This article estimates the impact of work migration and non‐work migration on per capita income, per capita expenditures, poverty and inequality in Vietnam using data from the two most recent Vietnam Household and Living Standard Surveys. We find that both work migration and non‐work migration have a positive impact on per capita expenditures of mi...

Summary This symposium brings together recent empirical contributions with respect to a number of related and highly relevant issues on the economics of microfinance. In particular, the contributions provide answers to the following two main questions: (1) does microfinance have an impact on the social and economic situation of the poor in developi...

This article provides new empirical evidence for the relevance of the signalling view on debt maturity, using data from a private bank in Vietnam. More specifically, we test the empirical predictions of the two main signalling models on debt maturity, that is, the models by Flannery (1986) and Diamond (1991), and compare this with the debt covenant...

This paper investigates strategic monitoring behavior within group lending. We show that monitoring efforts of group members differ in equilibrium due to the asymmetry between members in terms of future profits. In particular, we show that the entrepreneur with the highest future profits also puts in the highest monitoring effort. Moreover, monitor...

The present contribution offers a critical discussion of the current trend of commercialization of microfinance. It draws attention to some of the said commercialization's potentially negative effects, such as increasing indebtedness, rising interest rates, and reduced access to credit for the poorest of the poor. These issues have recently given r...

This article reviews developments in the Stock Trading Centre (STC) in Ho Chi Minh City, Vietnam, the main stock market in the country, since its start in 2000. It presents information about developments in the number of stocks traded, trading activity and stock-price developments. This article focuses on the question whether the market is weak-for...

This paper analyzes the determinants of trade credit demand and supply in the Tanzanian rice market, using data from individual trade transactions between rice wholesalers and rice retailers. We use a structural modelling approach to disentangle the supply and demand effects that may drive the use of trade credit in this market. We find evidence th...

This article studies the impact of group affiliation on the performance of firms in India during 1996-2001, with the goal of determining whether the positive valuation effects of group affiliation depend on the degree of group diversification. The results from this study indicate that prior support for that hypothesis actually is fragile and highly...

Incl. bibl., abstracts. The publication of the Assessing Aid report of the World Bank in 1998 has stimulated the debate on the future of development aid and aid policies. This collection contains a number of studies that aim to contribute to this debate. In this introduction we put the discussion on the future of development aid into perspective an...

We use experimental data from 35 randomly selected communities in Burundi to examine the impact of exposure to conflict on social-, risk- and time preferences. These types of preferences are important as they determine people’s propensity to invest and their ability to overcome social dilemmas, so that changes therein foster or hinder economic grow...

The positive relation between financial development and economic growth seems to have weakened in recent years and when analyzing only developed countries. We suggest here that banks' relative ability to intermediate funds cost-efficiently is a quality-based measure of financial development that complements conventional quantity-based measures. We...

In this study we show that Microfinance Institutions (MFIs) with more powerful CEOs have higher performance variability. A powerful CEO is defined as one that also chairs the board of directors. CEO power is reflected in higher performance variability if CEOs have more latitude of action, i.e. managerial discretion. Managerial discretion can be lim...

The capital adequacy framework Basel II aims to promote the adoption of stronger risk management practices by the banking industry. The implementation makes validation of credit risk models more important. Lenders therefore need a validation methodology to convince their supervisors that their credit scoring models are performing well. In this pape...