Determinants of margin in microfinance institutions

Beatriz Cu鬬ar-Fernᮤez, Yolanda Fuertes (), Carlos Serrano-Cinca () and Bego Guti鲲ez-Nieto
Authors registered in the RePEc Author Service: Begoña Gutiérrez-Nieto

Applied Economics, 2016, vol. 48, issue 4, 300-311

Abstract: Microfinance institutions (MFIs) lend to the poor. However, microfinance clients suffer from high interest rates, a type of poverty penalty. This article analyses the margin determinants in MFIs. A banking model has been adapted to microfinance. This model has been tested using 9-year panel data. Some factors explaining bank margin also explain MFI margin, with operating costs being the most important factor. Specific microfinance factors are donations and legal status, as regulated MFIs can collect deposits. It has also been found that MFIs operating in countries with a high level of financial inclusion have low margins.

Date: 2016
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Citations: View citations in EconPapers (6)

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Working Paper: Determinants of Margin in Microfinance Institutions (2012)
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DOI: 10.1080/00036846.2015.1078447

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