{"title":"Interest rate caps on microcredit: evidence from a natural experiment in Bolivia","authors":"M. J. Roa, Alejandra Villegas, Ignacio Garrón","doi":"10.1080/19439342.2021.1968934","DOIUrl":null,"url":null,"abstract":"ABSTRACT This paper evaluates the imposition of caps on microcredit lending rates through credit policies for productive sectors. This financial inclusion intervention provides a unique quasi-experiment, allowing to estimate its effect following a difference-in-differences analysis. Our results suggest that the imposition of interest rate ceilings negatively affected the portfolio balance of new microcredits and loans to Small and Medium Enterprises (SMEs) granted by Micro Finance Institutions (MFIs). The balance of the microcredit and SME loans portfolio granted by MFIs, relative to the company portfolio granted by banks, decreased by 26.1% for an average MFI for the period 2011-2018.","PeriodicalId":46384,"journal":{"name":"Journal of Development Effectiveness","volume":"7 1","pages":"125 - 142"},"PeriodicalIF":0.9000,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Development Effectiveness","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1080/19439342.2021.1968934","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"DEVELOPMENT STUDIES","Score":null,"Total":0}
引用次数: 3
Abstract
ABSTRACT This paper evaluates the imposition of caps on microcredit lending rates through credit policies for productive sectors. This financial inclusion intervention provides a unique quasi-experiment, allowing to estimate its effect following a difference-in-differences analysis. Our results suggest that the imposition of interest rate ceilings negatively affected the portfolio balance of new microcredits and loans to Small and Medium Enterprises (SMEs) granted by Micro Finance Institutions (MFIs). The balance of the microcredit and SME loans portfolio granted by MFIs, relative to the company portfolio granted by banks, decreased by 26.1% for an average MFI for the period 2011-2018.
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