Revisiting the growth and poverty effects of remittances in the African context

2021 Fiscal Year Research-status Report

• Project/Area Number: 21K01514
• Research Institution: Ritsumeikan University
• Principal Investigator: MASWANA J.C. 立命館大学, 経済学部, 教授 (30378525)
• Project Period (FY): 2021-04-01 – 2024-03-31
• Keywords: Microfinance / Economic growth / Poverty reduction

Outline of Annual Research Achievements

During the fiscal year 2021 we built the datasets and started preliminary estimation while extending the analytical framework to include indicators related to the quality of institutions. We slightly adjusted the overall the objective of the study, particularly the microeconomic dimension that looks at the extent to which workers’ remittances channeled through micro-financial institutions help reduce poverty. In addition to the mediating role of ICTs in further strengthening this remittances-poverty nexus, the research has been updated to also examines the effects of the COVID-19 pandemic.
Completion of the first paper (on a growth model accounting for migrants’ remittances in developing countries) and presentation at the 97th annual conference of the Western Economic Association (WEAI), in June 2022 in Portland (Oregon, USA).

Current Status of Research Progress

3: Progress in research has been slightly delayed.

Reason

As the result of the covid-19 pandemic, the field survey based on which the microeconomic dimension of the project is slightly delayed.

Strategy for Future Research Activity

Starting the interviews of microfinancial institutions (MFIs) and surveys of households in Nigeria and Indonesia, in July-November 2022.
First, interviews of remittance receiving MFI would shed light on average amount of transfer, extent of formal and informal transfer, frequency of such transfer, use of remittance, categories of remittances (e.g., simple or loan-based), data related to transaction (remittance) costs, interest rates on micro-loans and ease of using ICT-based transactions. Second, data on households will target households with membership to MFIs. The criterion for selecting the household interviewees will be those who have been receiving remittance for at least two years. The sample size will be determined, using a formula by Spiegel (1961). Mostly data related to loan disbursement are available at micro-financial institutions. The remaining household data will be collected through a questionnaire and interview; which will be designed following studies on microfinance conducted by Banerjee et al. (2010) and will be constituted of six sections collecting: 1. Basic socio-economic information of borrowers; 2. Main activities or sources of income; 3. Change in income, consumption, and savings; 4. Perception of the impact of loans on the household overall standard of living (e.g., health and health expenses, school enrolment of children, housing situation and changes in housing situation); 5. New income-generating activities and investment; 6. Obstacles faced and experienced by borrowers in terms of mobile payment availability and convenience.

Causes of Carryover

Due to COVID-19 pandemic, we were not able to implement the field survey or attend international conference. The requested amount for next year will be used to speed up the research.