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13 - Collateralizing Wages: The Case of Sangla ATM
- Edited by Hal Hill, Australian National University, Canberra, Majah-Leah V. Ravago, Ateneo de Manila University, James A. Roumasset, University of Hawaii, Manoa
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- Book:
- Pro-poor Development Policies
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 09 January 2024
- Print publication:
- 10 June 2022, pp 339-358
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Summary
INTRODUCTION
Informal lending is one of the more common sources of household financing in many developing countries, including the Philippines. Informal finance arrangements through business counterparts and extended family members, pawnshops, rotating savings and credit associations (ROSCAs), and informal money lenders often prove more efficient than their formal counterparts around the globe (Adams and Hunter 2019). Despite the wide acceptance and integration into society of these informal financing institutions, studies on them are few, especially in the context of developing countries (see, e.g., Agabin et al. 1989; Agabin 1993; Nagarajan, David, and Meyer 1992; Floro and Ray 1997; Adams and Hunter 2019).
Surveys by the Bangko Sentral ng Pilipinas (BSP, Central Bank of the Philippines) point to a growing share of informal money lenders among households’ funding sources in recent years, despite the regulators’ push to encourage a more inclusive financial sector, such as utilizing microfinance institutions and digital banks and easing regulatory requirements to entice households to join the formal financial system (Karlan and Morduch 2010; Kritz 2013; BSP 2018, 2020). The 2019 Financial Inclusion Survey of the BSP shows that informal money lenders held a significant role in various financing decisions of households (BSP 2020).
The expansion of the informal financing channel does not refer only to the increased client base, but also to product innovations that money lenders introduce. For instance, collaterals accepted by money lenders have evolved from goods, jewelries, land titles and household appliances to, recently, automatic teller machine (ATM) or debit cards.
This study takes a close look at a newly emerged credit arrangement called Sangla ATM or debit card pawning. Sangla ATM is an informal loan arrangement where a borrower uses as collateral an ATM card linked to an account that receives a regular salary or other forms of income. The borrower surrenders the ATM card and its personal identification number to the lender, who then uses the card to withdraw the loan repayment (principal and interest) on a regular frequency (typically twice a month) until the entire amount is fully repaid.
The popularity of debit card pawning in the Philippines has reached a broad range of borrowers who have access to an ATM‑linked bank account—from conditional cash transfer recipients of the government to private-sector employees and even government personnel (ABS‑CBN 2018, 2020).
The impacts of a community forestry program on forest conditions, management intensity and revenue generation in the Dang district of Nepal
- Narayan Raj Poudel, Nobuhiko Fuwa, Keijiro Otsuka
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- Journal:
- Environment and Development Economics / Volume 20 / Issue 2 / April 2015
- Published online by Cambridge University Press:
- 01 July 2014, pp. 259-281
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A growing literature documents the positive impact of community management on non-timber forest conservation but not on the condition of timber forests, which require higher management intensity than do non-timber forests. Using ground-level data of the age composition of trees and the management activities of timber forests and applying a rigorous econometric technique to deal with the endogeneity of handing over forest use rights to the community, we find that a longer period of community management is associated with a higher density of pole-size trees, indicating that community management facilitates the rehabilitation of timber forests. We also find that population pressure leads to deforestation under state management but encourages forest management under community management.
5 - Poverty and Vulnerability
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- By Arsenio M. Balisacan, University of the Philippines Diliman, Nobuhiko Fuwa, Chiba University
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- Book:
- Reasserting the Rural Development Agenda
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 04 July 2007, pp 121-158
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Summary
INTRODUCTION
By global standards, Asia has done remarkably well in both economic growth and poverty reduction during the past thirty years. However, this performance has not been uniform across sub-regions and countries. Indeed, even within a country, there is a typically large diversity in income growth rates and poverty reduction outcomes across household groups, locations, or socio-demographic attributes. In part, the diversity may reflect various patterns of social stratification arising from the effects of a combination of market imperfections, initial conditions, and political-economy dynamics.
In this paper, we distill not only the experiences, key research issues and findings on the nature and causes of poverty and vulnerability, but also the policy lessons emerging from the rapidly expanding literature on growth, poverty, vulnerability, and inequality in Asia. Our focus is on rural Asia. In Section II, we provide an overview of the vast number of macro-level studies exploring the connection between economic growth and poverty reduction. In Section III, we examine the evidence on the link between agricultural performance and poverty reduction. We then selectively review — in Sections IV and V — recent developments in micro-level studies on poverty dynamics and vulnerability. While the macro-level studies make us understand policy questions related to long-term development processes, the micro-level studies draw insights from the heterogeneity and diversity of economic agents and focus directly on behavioural mechanisms leading to poverty. We then conclude, in Section VI, with policy lessons and implications drawn from the review.
GROWTH AND POVERTY REDUCTION
Asia's gross domestic product (GDP) growth has consistently outpaced those of other regions of the world in the past thirty years. The region's economic growth rate averaged about 4.0 per cent per year, while the corresponding figures for developed countries and the world were about 2.6 per cent and 2.7 per cent, respectively. The growth accompanied a historic rapid poverty reduction, especially in East Asia and Southeast Asia. Between 1990 and 2001, the number of people living on less than a dollar a day fell by about 129 million. Poverty incidence in East Asia dropped from 31 to 12 per cent, while that in South Asia fell from 41 to 29 per cent. At these rates, the Millennium Development Goal (MDG) of halving by 2015 the proportion of people whose income falls below one dollar a day looks attainable for Asia.
1 - Challenges and Policy Options for Agricultural Development – Overview and Synthesis
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- By Arsenio M. Balisacan, University of the Philippines Diliman, Nobuhiko Fuwa, Chiba University
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- Book:
- Reasserting the Rural Development Agenda
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 04 July 2007, pp 1-32
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Summary
INTRODUCTION
This book attempts to take stock of the evolution of theoretical and empirical knowledge about economic development, mainly focusing on agricultural and rural development, and drawing mainly (if not exclusively) on experiences in Asia. There have been other such stock-taking exercises in development economics (e.g., Meier and Stiglitz 2001), but this book is somewhat unique in its exclusive focus on agricultural and rural development in Asia.
In the 1970s, agricultural and rural development occupied the centre stage of the economic development debate. Amid the increasing sense of food and resource scarcity, as reflected in rising commodity prices, investment in rural development was ranked top priority among development projects (see Chapter 8 by Barker and Rosegrant). The Green Revolution was in its early stages, and major efforts were underway to deliver complementary inputs such as fertiliser and subsidised credit, culminating in the Integrated Rural Development schemes. The impact of the Green Revolution (especially on small farmers) was then being fiercely debated.
After the 1980s, however, the perceived importance of the agricultural sector in the international development circle waned dramatically. Investments in rural development and agricultural research and development (R&D) declined sharply (see Barker and Rosegrant, Chapter 8). Correspondingly, Roumasset (Chapter 2) notes that the economics of agricultural development “has arguably been in decline,” and is “twice marginalized in the academe.” Nevertheless, Asia still accounts for about 60 per cent of the world's 1 .1 billion poor, and the majority of them are found in rural areas (Balisacan and Fuwa, Chapter 5). In addition, we take note of the following worldwide developments that are wielding tremendous effects on agriculture, to wit: the increasing globalisation, along with rapid changes in marketing systems, which is offering farmers (especially small farmers) in the region the opportunities and enormous challenges for greater competitiveness (Reardon and Timmer, Chapter 12); the Gene Revolution — characterised by rapid advances in agricultural biotechnology, driven mainly by the private sector — which is taking over the Green Revolution (Pingali and Raney, Chapter 6); and the increasing awareness and concerns for environmental problems, such as deforestation (Otsuka, Chapter 1 0; Coxhead, Chapter 11) and water scarcity (Barker and Rosegrant, Chapter 8), which present additional challenges for agricultural and rural development policy formulation.
Preface
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- By Arsenio M. Balisacan, University of the Philippines Diliman, Nobuhiko Fuwa, Chiba University
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- Book:
- Reasserting the Rural Development Agenda
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 04 July 2007, pp xi-xiv
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Summary
This volume is the final product of efforts to revisit familiar themes and controversies that have played a crucial role in shaping the way we view rural development. We are in deep gratitude to all the colleagues and organisations that have assisted us in the different stages of the project.
The idea for this volume drew inspiration from a SEARCA initiative in 1979, which, in cooperation with then Agricultural Development Council (ADC) of New York (now Winrock International), resulted in the publication of a book entitled Risk, Uncertainty and Agricultural Development, featuring such respected authors as Hans Binswanger, Jean-March Boussard, Robert Evenson, David Newberry, James Roumasset, Inderjit Singh, and Joseph Stiglitz, to name a few. Now, three decades and many global changes after, SEARCA has found it timely and relevant to revisit their views of agricultural development vis-à-vis the current situation in the region. The main objective is to draw up policy lessons from the major ideas and paradigms that have influenced academic and policy thinking in agricultural and rural development in the past 30 years.
SEARCA began formulating the plan for a conference as early as the first quarter of 2004, with the end goal of producing this book. It was decided that the conference would mark the beginning of the celebration of SEARCA's 40th Anniversary in November 2006. We sought the assistance of Emmanuel Esguerra in drafting a concept paper for the conference. We are thankful to him for the initial discussions and thoughts he shared with us toward this volume.
By bringing together an international group of acknowledged research scholars in agricultural and rural development in dialogue with policymakers from the Asian region, the conference, held in November 2005, provided a venue for articulating policy options on emerging development issues in the region. The discussions focused on several thematic and issue papers on agriculture and rural development, food security, population and environment, institutions, and biotechnology, among others. The papers presented were revised accordingly, taking into account the suggestions from the editors and discussants. The resulting volume attempts to identify the rural development challenges in the next 10 years and draws up possible directions for future academic and policy research.