Microcredit in Industrialized Countries: Unexpected Consequences of Regulatory Loan Ceilings
Anastasia Cozarenco and
No 16-021, Working Papers CEB from ULB -- Universite Libre de Bruxelles
Subsidized microfinance institutions (MFIs) provide affordable credit to small entrepreneurs. Many industrialized countries regulate MFIs. But in a market with accessible small business financing, regulatory loan ceilings can jeopardize the supply of microcredit to the most disadvantaged people. This is because small entrepreneurs in need of above-ceiling credit have the option to combine a ceiling-high microcredit with a supplementary loan from a regular bank. By reducing information asymmetry, this type of co-financing may prompt MFIs to divert credit away from entrepreneurs seeking below-ceiling loans. This study uses hand-collected data from a French MFI to test, and partly confirm, this theory.
Keywords: Microcredit; microfinance; regulation; loan ceiling; self-employment; entrepreneurs (search for similar items in EconPapers)
JEL-codes: C25 G21 G28 I38 L31 L51 M13 O52 (search for similar items in EconPapers)
Pages: 54 p.
New Economics Papers: this item is included in nep-ban, nep-dev, nep-ent 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://dipot.ulb.ac.be/dspace/bitstream/2013/229550/3/wp16021.pdf Œuvre complète ou partie de l'œuvre (application/pdf)
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:sol:wpaper:2013/229550
Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/229550
Access Statistics for this paper
More papers in Working Papers CEB from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().