Interest rate and the social performance of microfinance institutions

Michael Adusei

The Quarterly Review of Economics and Finance, 2021, vol. 80, issue C, 21-30

Abstract: The objective of this paper is to examine the effect of interest rate on the social performance of microfinance institutions (MFIs). This objective is pursued by employing data from 555 MFIs operating in 74 countries. The econometric techniques utilized in this paper have produced robust results suggesting that interest rate boosts the social performance (both the breadth and depth of outreach) of MFIs. The paper explains this outcome with no-alternative hypothesis. Clients of MFIs are mostly poor and, thus, lack access to alternative sources of funding. This compels them to access microcredit at any interest rates.

Keywords: Interest rates; Social performance; Microfinance institutions (search for similar items in EconPapers)
JEL-codes: G20 G21 G23 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:80:y:2021:i:c:p:21-30

DOI: 10.1016/j.qref.2021.01.009

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