Unsubsidized microfinance institutions

D’Espallier, Bert, Marek Hudon and Ariane Szafarz

Economics Letters, 2013, vol. 120, issue 2, 174-176

Abstract: This paper starts from the observation that 23% of the world’s microfinance institutions (MFIs) manage without subsidies. We examine how unsubsidized institutions cope with their social mission. Overall, the lack of subsidies worsens social performances. However, our results show that strategies to achieve financial self-sufficiency differ substantially across regions. African and Asian MFIs compensate for non-subsidization by charging higher interest rates. In Eastern Europe and Central Asia, unsubsidized MFIs find it more suitable to target less poor clients. Unsubsidized Latin American MFIs tend to reduce their share of female borrowers.

Keywords: Microfinance; Subsidies; Female borrowers; Poverty reduction; Average loan size; Interest rates (search for similar items in EconPapers)
JEL-codes: F35 G21 G28 O54 O57 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (76)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176513001924
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Unsubsidized Microfinance Institutions (2013)
Working Paper: Unsubsidized Microfinance Institutions (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:2:p:174-176

DOI: 10.1016/j.econlet.2013.04.021

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().