Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123658
Authors: 
Nwachukwu, Jacinta C.
Asongu, Simplice A.
Year of Publication: 
2015
Series/Report no.: 
AGDI Working Paper WP/15/004
Abstract: 
This study investigates the legitimacy of the relatively high interest rates charged by those microfinance institutions (MFIs) which have been transformed into regulated commercial banks using information garnered from a panel of 1232 MFIs from 107 developing countries. Results show that formally regulated micro banks have significantly higher average portfolio yields than their unregulated counterparts. By contrast, large-scale MFIs with more than eight years of experience have succeeded in lowering interest rates, but only up to a certain cut-off point. The implication is that policies which help nascent small-scale MFIs to overcome their cost disadvantages form a more effective pricing strategy than do initiatives to transform them into regulated institutions.
Subjects: 
Microfinance
microbanks
non-bank financial institutions
interest rates
age
economies of scale
developing countries
JEL: 
G21
G23
G28
E43
N20
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.