Financial Services in Less Developed Countries at ASE's Summer Institute for Economic Research

Friday, Jan 27, 2017
by vrosenth

Last December, JRCPPF’s Post-Doctoral Research Associate Giorgia Barboni traveled to Cotonou, Benin, to teach a workshop on “Financial Services in Less Developed Countries” at the Summer Institute for Economic Research (SIER) held at the African School of Economics (ASE).  SIER was launched in 2015 with the goal of contributing to the establishment of networks of collaborative, multidisciplinary research and policy engagement involving African academics and policy makers.

SIER took place over 5 days (December 12-17) and included three distinct sessions: (1) Training on Research Design; (2) Research Conference and (3) Policy Forum and Commencement.  The first session had approximately 100 participants and lectures were given by instructors from Yale (USA), Princeton (USA), Makerere (Uganda), Navarra (Spain) and Paris 10 (France).

Barboni’s participation was made possible under the cooperation agreement between JRCPPF and the African School of Economics. The aim of Barboni’s workshop, titled "Financial Services in Less Developed Countries," was to give the students an overview of the main failures that arise in credit markets because of information asymmetries. The workshop started with a general introduction on financial exclusion in developing countries, followed by a discussion of the role and importance of credit, savings and insurance in the lives of the poor. The students were presented with simple theoretical models of Adverse Selection and Moral Hazard meant to show how imperfect information between customers and lenders translate into high borrowing costs.

The discussion then turned to microfinance, and how the provision of micro loans that relies on the acquisition of local information on the borrowers' creditworthiness can help overcome information asymmetries. The results from a large body of research on microfinance were the topic of a detailed discussion.  

Barboni also participate in SIER’s research conference, presenting the results of her own experimental work on microfinance. She presented the paper titled "Repayment Flexibility in Microfinance Contracts: Theory and Experimental Evidence on Take-Up and Selection" which studies, through an artefactual field experiment, the impact of introducing repayment flexibility within microfinance contracts.

Reflecting on her experience at SIER, Barboni said: “I was very impressed by the curiosity and the attention of the students at the Summer Institute. Most of them have a very clear idea of what career they want to pursue after graduating from ASE. Many students asked me questions about what it is like to study abroad, and in particular in the United States. I felt that faculty and staff at ASE are doing a brilliant job in shaping a talented generation of students, who I am sure will have bright careers in many fields. Their strong commitment was evident to me even from the very short experience I had with in Cotonou".

JRCPPF congratulates the African School of Economics for a second very successful Summer Institute and looks forward to future collaborations in preparing the next generation of African economic scholars and policy makers.