The Lending Interest Rates in the Microfinance Sector: Searching for its Determinants

13 Pages Posted: 21 Mar 2013 Last revised: 3 Apr 2013

See all articles by Pablo Cotler

Pablo Cotler

Universidad Iberoamericana

Deyanira Almazan

University of Sussex

Date Written: March 20, 2013

Abstract

Using data from 1299 microfinance institutions (MFIs) in 84 countries and following different approaches, it was found the lending interest rate is determined by the funding cost, the loan size, and the efficiency level of MFIs. With respect to competition, results are mixed. Only in Asia is a negative correlation between competition and lending interest rates detected. For other subsamples, it was found the competition is more likely to be negatively correlated with the size of loans.

Keywords: Africa, Latin America, Asia, lending interest rates, microfinance

JEL Classification: G21, G28

Suggested Citation

Cotler, Pablo and Almazan, Deyanira, The Lending Interest Rates in the Microfinance Sector: Searching for its Determinants (March 20, 2013). Journal of CENTRUM Cathedra: The Business and Economics Research Journal, Vol. 6, Issue 1, pp. 69-81, 2013, Available at SSRN: https://ssrn.com/abstract=2236430

Pablo Cotler (Contact Author)

Universidad Iberoamericana ( email )

Reforma 880
Lomas de Santa Fe
Mexico City, Mexico DF 01219
Mexico

Deyanira Almazan

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

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