Exploring Microfinance Clients with Disabilities: A Case Study of an Ecuadorian Microbank

Abstract

Using a unique sample from an Ecuadorian microfinance institution that has focused on increasing its outreach to disabled clients, we present a comparative analysis of the characteristics of disabled versus non-disabled clients. The study shows that disabled clients are more often male, are less likely to be living with a partner, have fewer children, and are older compared to their non-disabled counterparts. Moreover, we observe differences in repayment statistics between clients with and without disabilities, as well as differences within the disability sample. Our findings illustrate the importance of adapting microloans to the special needs of persons with disabilities.

Acknowledgements

We are grateful for comments from Ariane Szafarz, Bert D’Espallier, two anonymous referees, and seminar participants at the 6^th International Research Workshop on Microfinance and Governance, Colombo, Sri Lanka. We thank Master’s student Elisabeth Berg Pedersen and staff at Banco D-MIRO for their efforts in collecting the data for this study. The data are available from the authors upon request.

Disclosure statement

Roy Mersland has for many years worked for the Norwegian Mission Alliance, the founder and owner of Banco D-MIRO. Nowadays, he still serves as a board member of the bank. However, with respect to the specific issues discussed in the paper, the authors believe that Mersland's relations to Banco D-MIRO do not cause any conflicts of interest. No additional potential conflicts of interest were reported by the authors.

Notes

1. (Social) equity is a frequently discussed concept in this article. Equity is about creating equal opportunities for people with different characteristics, resources and needs. Blanchard (1986) states that ‘equity and fairness are synonymous’ (p. 29). A more precise definition is offered by Falk, Hampton, Hodgkinson, Parker, and Rorris (1993, p. 2): ‘Equity derives from a concept of social justice. It represents a belief that there are some things which people should have, that there are basic needs that should be fulfilled, that burdens and rewards should not be spread too divergently across the community, and that policy should be directed with impartiality, fairness and justice towards these ends.’

2. The average loan size (qualified amount) is $1636 USD for the PWD sample and $1535 USD for the control sample. The difference is not significant as measured by a t-test for differences between means (t-value: 0.95).

3. The data are anonymised before any analysis is carried out.

4. The observant reader will note that a few of the PWDs did not list the age at which they became disabled.