Aug 12, 2012

Subsidies in micro-finance

We find that MFIs that receive subsidized financing increase their staff size, spend more on administrative expenses and make greater provision for loan losses. The subsidy does not lead to more total lending, but it is associated with a shift to non-commercial loans.
That is from the new paper "Cheap Credit, Lending Operations and International Politics: The Case of Global Microfinance" by Garmaise and Natividad (Journal of Finance, forthcoming).

No comments:

Post a Comment