Abstract
The microfinancing sector has experienced a rise in both loan interest rates and borrower loan loss rates recently. By employing a sample of microfinance institutions (MFIs) from the MixMarket database during 2004-2012 around the world, we find that the lag of borrower loan loss is positively related to loan interest rates while the lag of loan interest rates is also positively related to borrower loan loss. The impact of loan loss rate on loan interest rates, however, seems to be more substantial than the influence of loan interest rates on the loan loss rate. Furthermore, we find that the higher interest rates charged by MFIs are followed by higher operating performance of MFIs, indicating the possibility that MFIs are charging relatively high interest rates mainly for their own profitability rather than helping low income people.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Journal of International and Interdisciplinary Business Research
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
