Lending Risk in MFIs: The Extreme Bounds of Microeconomic and Macroeconomic Factors

John Inekwe

Journal of Small Business Management, 2019, vol. 57, issue 2, 538-558

Abstract: Using 1,234 microfinance firms in 106 countries, this study investigates the determinants of default on the microcredit debt obligation of borrowers. Using the variant of extreme bounds analysis that systematically tests the fragility of coefficient estimates, we examine the importance of 42 variables in explaining default risk. At the micro level, the results from the modeling of model uncertainty reveal that regulation, cost per loan/cost per borrower, loan balance, borrower per loan officer, and the number of loan officers are robust factors. From the macroeconomic context, the time required to start a business and human capital are the determinants of default on debt obligations.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1111/jsbm.12401 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:ujbmxx:v:57:y:2019:i:2:p:538-558

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ujbm20

DOI: 10.1111/jsbm.12401

Access Statistics for this article

Journal of Small Business Management is currently edited by Eric Liguori

More articles in Journal of Small Business Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().