12 results on '"Moh'd Al-Azzam"'
Search Results
2. On the complex relationship between different aspects of social capital and group loan repayment
- Author
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Christopher F. Parmeter, Moh'd Al-Azzam, and Sudipta Sarangi
- Subjects
Economics and Econometrics ,Microfinance ,050208 finance ,Group (mathematics) ,Model selection ,Homogeneity (statistics) ,media_common.quotation_subject ,05 social sciences ,Bayesian inference ,law.invention ,Friendship ,law ,0502 economics and business ,Economics ,Econometrics ,050207 economics ,Social capital ,Count data ,media_common - Abstract
Do all aspects of social capital improve repayment behavior in group lending programs? The group lending literature typically uses one or few measures of social capital in a linear form, and systematically understates the uncertainty of results and model specifications. As a result, many papers conclude that specific measures of social capital do not matter. This paper introduces Bayesian Model Averaging to the group lending literature and simultaneously tests the validity of six different measures of social capital. While the initial analysis suggests that only few measures matter, this result becomes invalid when using model selection criteria and Bayesian Model Averaging while allowing for nonlinearity and interactions between different aspects of social capital. We find geographical proximity, trust, friendship, group homogeneity, and acquaintanceship to be important factors in explaining group repayment with mixed evidence for relatives. Our results suggest that microfinance institutions should target borrowing groups with more social capital.
- Published
- 2020
3. Financing new entrepreneurship: Credit or microcredit?
- Author
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Moh’d Al-Azzam and Lanouar Charfeddine
- Subjects
Economics and Econometrics ,Asymmetric information ,Early stage entrepreneurship ,Conventional banking ,Microfinance ,Finance - Abstract
Building on the theory of information asymmetry, we investigate the impact of conventional banking versus the impact of microfinance on new entrepreneurship. We use a panel dataset collected from 49 developing countries between 2003 and 2018 and apply a random effects linear regression model with endogenous sample selection. We show, among other results, that conventional banking has no direct impact on new entrepreneurship. In contrast to conventional banking, microfinance appears to promote the growth of new entrepreneurship. However, as the conventional banking sector grows, the positive impact of microfinance on new entrepreneurship diminishes. 2022 Elsevier B.V. Scopus
- Published
- 2022
4. Financing microfinance institutions: subsidies or deposit mobilisation
- Author
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Moh'd Al-Azzam
- Subjects
Finance ,Economics and Econometrics ,Microfinance ,050208 finance ,business.industry ,05 social sciences ,Subsidy ,Conventional wisdom ,deposit mobilisation ,sustainability ,law.invention ,Outreach ,subsidies ,law ,0502 economics and business ,Sustainability ,Financial sustainability ,Economics ,outreach ,050207 economics ,business ,Double bottom - Abstract
According to conventional wisdom, dependence on subsidies cannot achieve the double bottom lines of microfinance institutions (MFIs): outreach and financial sustainability. The application of market-based principles to microfinancing, such as deposit mobilisation, has been long suggested as an answer to this problem. This paper documents the following findings regarding this issue. First, deposit mobilisation crowds out subsidies. Second, subsidies and deposit mobilisation reduce microcredit interest rates and allow MFIs to reach poorer borrowers. Third, subsidies and deposit mobilisation worsen financial sustainability. Fourth, subsidies reduce repayment rates, while deposit mobilisation has no impact on repayment. Overall, the results suggest that neither subsidies nor deposit mobilisation solve the traditional problem of trade-off between outreach and financial sustainability. Scopus
- Published
- 2018
5. Currency risk and microcredit interest rates
- Author
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Karim Mimouni and Moh'd Al-Azzam
- Subjects
Economics and Econometrics ,Microfinance ,050204 development studies ,media_common.quotation_subject ,Local currency ,05 social sciences ,Devaluation ,Financial system ,law.invention ,Interest rate ,Exchange rate ,law ,Currency ,Debt ,0502 economics and business ,Business ,050207 economics ,Business and International Management ,Foreign exchange risk ,Foreign currency risk ,Microcredit interest rates ,media_common - Abstract
Foreign currency debt provides additional access to capital and offers funds in favorable and flexible terms to microfinance institutions (MFIs). Yet, we find that the use of foreign currency debt, on average, leads to higher microcredit interest rates. We also find that MFIs operating in countries with pegged exchange rate regimes and profit MFIs are better able to mitigate foreign currency risk. The results of the paper suggest that local currency debt is a better option for MFIs if the goal is to provide microcredit at lower interest rates. Scopus
- Published
- 2017
6. The impact of Sukuk on the performance of conventional and Islamic banks
- Author
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Karim Mimouni, Akram Temimi, Moh'd Al-Azzam, and Houcem Smaoui
- Subjects
040101 forestry ,Sukuk ,Economics and Econometrics ,050208 finance ,05 social sciences ,Financial crisis ,Islam ,Financial system ,Bank performance ,04 agricultural and veterinary sciences ,Competition (economics) ,GMM estimation ,0502 economics and business ,0401 agriculture, forestry, and fisheries ,Profitability index ,Business ,Market development ,Finance - Abstract
This paper examines the impact of Sukuk market development on banks' profitability using a dataset of 71 Islamic banks (IBs) and 146 conventional banks (CBs) spanning 13 countries over the 2003–2014 period. Using a dynamic panel model, we find that the overall bank profitability is negatively impacted by Sukuk market development. However, when we control for whether the bank is Islamic or conventional, important findings emerge. The results suggest that Sukuk development reduces IBs' profitability but has no impact on CBs' performance. In addition, the evidence shows that these adverse effects on IBs' profitability are substantially lower after the 2008 global financial crisis. Accordingly, our findings suggest that IBs were able to overcome Sukuk competition after the crisis.
- Published
- 2019
7. CORRUPTION AND MICROCREDIT INTEREST RATES: DOES REGULATION HELP?
- Author
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Moh'd Al-Azzam
- Subjects
Economics and Econometrics ,High interest ,Cost structure ,Corruption ,050204 development studies ,media_common.quotation_subject ,05 social sciences ,International economics ,Monetary economics ,Interest rate ,0502 economics and business ,Economics ,Criticism ,050207 economics ,Literature study ,media_common - Abstract
Misunderstandings about the structure of microcredit interest rates continue to generate rich criticism of the industry's high interest rates. Research has focused attention on the cost structure of interest rates and, more recently, on macroeconomic and macro-institutional factors. While the cost structure is probably the most important determinant of interest rates, other factors also matter. In addition to other important results that usually validate the empirical literature, this paper finds that microcredit interest rates respond positively to corruption. The analysis shows that there is asymmetry between the effects of corruption, depending on whether or not the MFIs are regulated. While corruption has a positive and significant impact on interest rates of unregulated MFIs, it has a negligible impact on interest rates of regulated MFIs.
- Published
- 2016
8. Does the Group Leader Affect Repayment Performance Differently?
- Author
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Moh'd Al-Azzam, Maria Heracleous, and Sudipta Sarangi
- Subjects
Economics and Econometrics ,Interpersonal ties ,Rest (finance) ,Theoretical models ,Negative binomial distribution ,Operations management ,Group leader ,Joint and several liability ,Affect (psychology) ,Psychology ,Social psychology - Abstract
Theoretical models of group lending assume that all group members are identical in terms of their effect on repayment performance. In practice, however, this may not be true. We use a unique data set obtained from a survey of 160 borrowing groups in Jordan to investigate the impact of joint liability, screening and monitoring activities, and social ties of the group leader and other group members on repayment performance as measured by the intensity of default using a negative binomial II model. Our results suggest that the joint liability and screening activities of the leader are more strongly related to repayment performance than the same variables for the rest of the group members. Social ties of all members have a significant effect on repayment, while monitoring activities have no effect.
- Published
- 2013
9. Is exchange rate risk priced in microfinance?
- Author
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Karim Mimouni and Moh'd Al-Azzam
- Subjects
Economic development ,050204 development studies ,media_common.quotation_subject ,Financial intermediary ,Monetary economics ,Microfinance ,law.invention ,Exchange rate ,law ,0502 economics and business ,Economics ,050207 economics ,G12 ,Exchange risk ,Financial intermediation ,media_common ,F31 ,Floating exchange rate ,05 social sciences ,Interest rate ,Interest rate parity ,Covered interest arbitrage ,Business, Management and Accounting (miscellaneous) ,G23 ,Foreign exchange risk ,Finance ,F63 - Abstract
High microcredit interest rates have often been a source of criticism against the microfinance movement. Research has focused attention on the cost structure of interest rates and more recently on the macroeconomic and macro-institutional factors. While cost structure is probably the most important determinant of interest rates, other factors can also matter. This paper uses an innovative measure of foreign exchange risk to explore its impact on microcredit interest rates. We show that microfinance institutions that operate in countries with fixed exchange rate regimes tend to charge lower interest rates than those operating in countries with floating exchange rate regimes.
- Published
- 2016
10. Do oil producing countries offer international diversification benefits? Evidence from GCC countries
- Author
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Lanouar Charfeddine, Karim Mimouni, and Moh'd Al-Azzam
- Subjects
Emerging stock markets ,International stock markets ,Oil shocks ,Economics and Econometrics ,050208 finance ,Financial economics ,education ,05 social sciences ,Diversification (finance) ,International diversification ,Multivariate garch ,Time-varying correlation ,0502 economics and business ,Economics ,Portfolio ,Multivariate GARCH ,Structural breaks ,Time varying correlation ,050207 economics ,Emerging markets ,Conditional diversification benefits (CDBs) ,Stock (geology) - Abstract
This paper provides evidence of the existence of diversification benefits in international stock markets when oil producing countries are included in a global portfolio. Moreover, it examines whether recent oil shocks and financial events have significant impact on the conditional correlations and diversification benefits. Using stock returns from developed, emerging, GCC countries and a global portfolio, the empirical findings show that while developed and emerging stock markets have experienced increased correlations over relatively long periods of time, the correlation in GCC stock markets remained low and constant offering high diversification benefits. Interestingly, the paper also finds that, during 2012-2014, the rising conditional correlation levels have reversed trends in developed and emerging markets alike offering more potential for international diversification. Our results are robust to model selection, data frequency, and innovations distribution. 2016 Elsevier B.V.. Scopus
- Published
- 2016
11. Foreign Exchange Risk in Microfinance: An Empirical Evidence
- Author
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Karim Mimouni, Moh'd Al Azzam, and Sudipta Sarangi
- Subjects
Floating exchange rate ,Microfinance ,media_common.quotation_subject ,Financial intermediary ,Monetary economics ,International economics ,Interest rate ,law.invention ,Interest rate parity ,Exchange rate ,law ,Covered interest arbitrage ,Business ,Foreign exchange risk ,media_common - Abstract
Misunderstanding of the structure of microcredit interest rates remains a rich source of generating criticism against the industry high interest rates. Research has focused its attention on the cost structure of interest rates and recently on the macroeconomic and macro-institutional factors. While the cost structure is probably the most important determinant of interest rates, other factors matter too. This paper explores the risk of foreign exchange in microfinance. On average, MFIs that operate in countries with fixed exchange rate regimes tend to charge lower interest rates than those operating in countries with floating exchange rate regimes.
- Published
- 2014
12. The Impact of Socioeconomic Factors and Financial Access on Microfinance Institutions
- Author
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Karim Mimouni, Mohammed Abu Ali, and Moh'd Al-Azzam
- Subjects
Finance ,Microfinance ,business.industry ,Total fertility rate ,media_common.quotation_subject ,Fertility ,Competitor analysis ,law.invention ,Outreach ,Market segmentation ,law ,Profitability index ,business ,Socioeconomic status ,media_common - Abstract
This paper is an attempt to unravel new factors that contribute to the success of microfinance institutions “MFIs.” We investigate whether countrywide socioeconomic characteristics and financial access can impact MFIs’ performance. Using data on 222 MFIs we find that countrywide socioeconomic characteristics such as fertility, income and education are important determinants of MFIs’ performance. For example, profitability of MFIs is more likely to fall and default on loans is more likely to rise if fertility rate increases. We also find that countrywide financial access indicators have significant impact on MFIs’ performance. For example, access to commercial banks deposit accounts has a significant and positive impact on MFIs’ success. Access to loans and commercial banks outreach appear to have a negative impact on MFIs’ performance. These results are important as they contradict the generally accepted assumption that commercial banks and MFIs operate in two different market segments and, hence, they are not direct competitors. Overall, the results suggest that several socioeconomic characteristics and financial access elements are important ingredients in evaluating MFIs’ performance.
- Published
- 2012
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