Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/251316 
Year of Publication: 
2020
Series/Report no.: 
Development Research Working Paper Series No. 03/2020
Publisher: 
Institute for Advanced Development Studies (INESAD), La Paz
Abstract: 
This paper evaluates the imposition of caps on microcredit lending rates through directed credit policies for productive sectors. This financial inclusion intervention provides a unique quasi-experiment, allowing to estimate its causal effect following a difference-in-differences analysis. Our results suggest that the imposition of interest rate ceilings negatively affected the portfolio balance of new microcredits and loans to SMEs granted by MFIs. Particularly, we find robust results indicating that the balance of the microcredit and SME loans portfolio granted by MFIs, relative to the company portfolio granted by banks, decreased by 26.1% for an average MFI for the period 2011-2018.
Subjects: 
Interest rate ceilings
financial inclusion
credit access
microcredit loans
small and medium enterprises loans
JEL: 
G18
G28
G38
Document Type: 
Working Paper

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