Mahmoud, Chowdhury Shameem and Khalily, M. A. Baqui and Wadood, Syed Naimul (2009): Dynamics of market share in the microfinance industry in Bangladesh.
Download (599Kb) | Preview
We discuss evidence that the microcredit industry in Bangladesh has seen emergence of large variations in the size of the microfinance institutions operating in the market-- on the one hand, there are large national-level MFIs, while on the other hand, small localized MFIs operating only within the confines of a small area. Data from a recent survey of Pathrail union in Tangail district, a seasoned place for microcredit, reveals that within the local market competition is becoming more and more intense over time between established national-level MFIs and newly emerging local-level MFIs for market shares in terms of loan amount as well as borrowed members. Data reveals that there is market segmentation where some borrowers and MFIs opt for a package of low interest rates tied with low amount of loan disbursed and some other borrowers and MFIs settle for a package of high interest rates tied with high amount of loan disbursed. A Tobit regression estimation of member market shares in village micro credit market shows that size of the MFI, years of operation in the village, average loan size, deposit interest rates, loan amount disbursed for unique loan purposes (i.e., housing loan) are key determinants in determining MFI shares of a village microcredit market.
|Item Type:||MPRA Paper|
|Original Title:||Dynamics of market share in the microfinance industry in Bangladesh|
|Keywords:||Microcredit; Market Share; Product and Provider Characteristics of Microcredit|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C34 - Truncated and Censored Models; Switching Regression Models
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
D - Microeconomics > D4 - Market Structure and Pricing
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
|Depositing User:||Naimul Wadood|
|Date Deposited:||12. Jul 2009 16:06|
|Last Modified:||12. Feb 2013 04:41|
Carlton, Dennis W. and Jeffrey M. Perloff (2000). “Modern Industrial Organization”, Addison-Wesley Longman, Inc., New York
Cull, Robert, Asli Demirguc-Kunt, and Jonathan Morduch (2009). “Microfinance Meets the Market”, Journal of Economic Perspectives, Vol. 23, No. 1, Winter 2009, pp. 167–92
Iftekhar A. Chaudhury and Imran Matin (2002). “Dimensions and Dynamics of Microfinance Membership Overlap -- A Micro Study from Bangladesh”, Small Enterprise Development, Vol.13, No.2, June 2002
Matin, Imran (undated). “CGAP Note Book 1: Dimensions and Dynamics of MFI Competition in Bangladesh”, Research Brief, Consultative Group to Assist the Poor (CGAP), the World Bank, Washington D.C.
Meyer, Richard L.(2002). “The Demand for Flexible Microfinance Products: Lessons from Bangladesh”, Journal of International Development, Vol. 14, pp. 351-368
Microcredit Regulatory Authority (2008).“NGO-MFIs in Bangladesh: Vol. III, June 2006”, Microcredit Regulatory Authority (MRA), Dhaka
Roodman and Qureshi (2006). “Microfinance as Business”, Unpublished Working Paper, Center for Global Development, Washington D.C., November 2006
Yunus, Muhammad (2007). “Remarks by Muhammad Yunus, Managing Director, Grameen Bank”, Microcredit Summit E-News, Vol. 5, No. 1, July 2007, as cited in Cull, Kunt and Morduch (2009)
Zaman, Hassan (2004). “The Scaling-Up of Microfinance in Bangladesh: Determinants, Impact, and Lessons”, World Bank Policy Research Working Paper, 3398, September 2004, The World Bank, Washington D.C.
Charitonenko, Stephinie and S. M. Rahman (2002). “Commercialization of Microfinance: Bangladesh”, Asian Development Bank, Manila, September 2002
Uddin, Jashim (undated). “Overlapping -- a Crucial Issue of Microcredit”, Palli Karma Shahayak Foundation (PKSF), Dhaka
Wooldridge, Jeffrey M. (2000). “Introductory Econometrics: A Modern Approach”, South-Western College Publishing, The Thomson Learning, United States
Greene, William H. (2000). “Econometric Analysis”, Fourth Edition, Prentice Hall, Upper Saddle River, New Jersey