The Poverty Penalty and Microcredit
| Autor: | Beatriz Cuellar-Fernández, Yolanda Fuertes-Callén, Begoña Gutiérrez-Nieto, Carlos Serrano-Cinca |
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| Rok vydání: | 2016 |
| Předmět: |
Finance
Labour economics Microfinance Sociology and Political Science Poverty business.industry 050204 development studies 05 social sciences General Social Sciences Sample (statistics) Effective interest rate law.invention Goods and services Arts and Humanities (miscellaneous) law Cost of funds index 0502 economics and business Developmental and Educational Psychology Economics Profitability index 050207 economics Fixed cost business |
| Zdroj: | Social Indicators Research. 133:455-475 |
| ISSN: | 1573-0921 0303-8300 |
| DOI: | 10.1007/s11205-016-1368-4 |
| Popis: | A poverty penalty arises when the poor pay more than the non-poor to access goods and services. An example is the cost to access credit. Microfinance Institutions (MFIs) usually explain their high interest rates on the grounds of the high risk involved in microcredit, the high fixed cost associated with small loans and the high financial expenses borne by MFIs due to difficulties in deposit collection. The paper finds that a poverty penalty exists. After identifying drivers of the poverty penalty in a sample of MFIs from 17 countries, this paper focuses on the Colombian case. Operating costs is the most important factor explaining effective interest rates. Other factors, such as risk, cost of funds, or profitability, are relevant in some regions. This paper encourages transparent pricing as a keystone for ethics in these entities. |
| Databáze: | OpenAIRE |
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