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Competition, Loan Rates and Information Dispersion in Nonprofit and For-profit Microcredit Markets

Baquero, G, Hamadi, Malika and Heinen, A (2017) Competition, Loan Rates and Information Dispersion in Nonprofit and For-profit Microcredit Markets Journal of Money, Credit, and Banking.

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Abstract

We describe the competitive environment of microcredit markets globally and we study the effects of competition on loan rates of microfinance institutions (MFIs). We use a new database from rating agencies, covering 379 for-profit and nonprofit MFIs in 67 countries over 2002-2008. Controlling for interest rate ceilings and other countryspecific factors, we first find that nonprofits are relatively insensitive to industry-wide concentration changes, while for-profits charge significantly lower rates in less concentrated markets. Second, we find spillover effects between the for-profit and nonprofit segments. Third, we show that the effects of concentration are consistent with an information dispersion mechanism.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Baquero, GUNSPECIFIEDUNSPECIFIED
Hamadi, Malikam.hamadi@surrey.ac.ukUNSPECIFIED
Heinen, AUNSPECIFIEDUNSPECIFIED
Date : 24 August 2017
Copyright Disclaimer : Copyright © 2017 Elsevier B.V. All rights reserved. This is the peer reviewed version of an article to be published in final form at http://www.sciencedirect.com/science/article/pii/S1350417717302298. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Uncontrolled Keywords : Loan rates, bank competition, microfinance, information dispersion, nonprofit institutions.
Depositing User : Melanie Hughes
Date Deposited : 24 May 2017 13:15
Last Modified : 27 Jul 2017 13:10
URI: http://epubs.surrey.ac.uk/id/eprint/841126

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