PMMA-20428 The unintended consequences of the Malawi Farm Input Subsidy Programme (FISP): Women's entrepreneurship and financial inclusion.

Abstract

“Do general programs aimed at improving overall well-being have positive spillover over effects on specific improvements – particularly on women’s entrepreneurship activity and their financial inclusion? “ This paper answers the question using evidence from the general farm input subsidy of an agro-economy, Malawi. The program provides coupons to poor farmers for purchasing inputs at a reduced price with an aim of enhancing food security (Ricker-Gilbert, Jayne & Chirwa, 2011). In Malawi, women contribute disproportionately to agricultural labour but remain financially excluded. They rely on informal financing, mainly Village Banks. Under these banks members save money weekly and borrow at an agreed interest rate (Ksoll, Lilleør, Lønborg & Rasmussen, 2016). The village banks utilise community relationships and customs to evade transaction costs faced by formal financing. Therefore, the study informs policy on whether generic programs-such as the subsidy, in contrast to gender-specific programs, provide an adequate approach to reducing financial gender gaps. This falls under the PAGE theme of Entrepreneurship and Financial Inclusion, particularly the subtheme of Discrimination and Social Attitudes. We hypothesise that financial exclusion is reduced by increased bargaining power of women in agriculture, whose strengthened positions also allow them to participate in village banking. The wide coverage of the program creates potential for elimination of remote-residence structural discrimination. We employ instrumental variables and fixed effects estimation to address endogeneity. We use data from the World Bank Living standards Measurement Survey. The data is a longitudinal covering three waves with three-year gaps in between the waves from 2010-2013-2016.


Members

Project leader: Dieter von Fintel

Project researchers: Martin Mwale | Anja Smith | Tony Mwenda Kamninga | Catherine Manthalu | Joy Omar Karim

Scientific mentors: Francesca Marchetta

Policy outreach mentors: Stephen Wainaina


Working Papers

No working papers.


Policy Briefs

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Proposal

Title Modified Size Comments Recommendations
The unintended consequences of the Malawi Farm Input Subsidy Programme (FISP): Women's entrepreneurship and financial inclusion. 2019-09-12 563.17kB 0 0

Final report

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