Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313581 
Authors: 
Year of Publication: 
2017
Citation: 
[Journal:] Review of Development Finance [ISSN:] 2959-0930 [Volume:] 7 [Issue:] 2 [Year:] 2017 [Pages:] 120-133
Publisher: 
Elsevier, Amsterdam
Abstract: 
This study examines the exposure of microfinance institutions to liquidity-, interest rate and foreign exchange (FX) risk. Using manually collected data from microfinance institutions' financial reporting, I find that the microfinance sector faces minimal liquidity risk, high interest rate risk and a lower than commonly assumed exposure to FX risk. Linking risk exposure to institutional characteristics, the data shows that legal status and regional affiliation are correlated with risk exposure while regulatory quality is not. Results suggest that the development community may not expect large benefits from expanding the plethora of current measures taken to mitigate liquidity or FX risk.
Subjects: 
Microfinance
Financial risk
Liquidity risk
FX risk
Regulation
JEL: 
G21
G32
O16
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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