Record Details

Effective Cost of Borrowing from Microfinance Institutions

Journal of Economics Bibliography

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Field Value
 
Title Effective Cost of Borrowing from Microfinance Institutions
 
Creator TUTLANI, Ankur; Jawaharlal Nehru University
 
Subject Microfinance; Group lending; Informal finance; Transaction cost; Effective cost
G21; O16; O17
 
Description Abstract. It has been observed lately that the dependence on moneylenders for borrowing needs of poor borrowers remained stable despite the presence of MFIs, particularly in developing economies. This is surprising given the fact that MFIs charge relatively lower interest rate as compared to moneylenders. The paper explains this trend by arguing that the effective cost of borrowing from MFI is higher relative to the effective cost of borrowing from moneylender. It is due to the additional burden incurred in the form of transaction costs in case of MFI borrowing. Simulation results also support this phenomenon.Keywords. Microfinance, Group lending, Informal finance, Transaction cost, Effective cost.JEL. G21, O16, O17.
 
Publisher Journal of Economics Bibliography
 
Contributor —
 
Date 2016-03-18
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEB/article/view/674
10.1453/jeb.v3i1.674
 
Source Journal of Economics Bibliography; Vol 3, No 1 (2016): March; 134-147
2149-2387
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEB/article/view/674/715
 
Rights Copyright (c) 2016 Journal of Economics Bibliography
http://creativecommons.org/licenses/by-nc/4.0