Microfinance and Moneylender Interest Rate: Evidence from Bangladesh
MPRA Paper from University Library of Munich, Germany
The linkage between the formal and informal credit markets has long been of great interest to development economists. This paper addresses one important aspect of the linkage by empirically investigating the impact of the microfinance program expansion on the moneylender interest rates in Bangladesh, and finds that moneylender interest rates increase with microfinance program expansion. MFI program expansion increases moneylender interest rates in the villages in which more loans are invested in productive economic activities than consumption. Borrowers resort to moneylenders for additional funds because of inadequate supply, unavailability of seasonal working capital from MFIs, and tight repayment schedule, which in turn increases demand for moneylender loans.
Keywords: Moneylender; microfinance; interest rate; informal sector. (search for similar items in EconPapers)
JEL-codes: C31 O12 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/17800/1/MPRA_paper_17800.pdf original version (application/pdf)
Journal Article: Microfinance and Moneylender Interest Rate: Evidence from Bangladesh (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17800
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().