Is exchange rate risk priced in microfinance?
Author | Al-Azzam, Moh'd |
Author | Mimouni, Karim |
Available date | 2021-06-24T06:47:11Z |
Publication Date | 2016 |
Publication Name | Research in International Business and Finance |
Resource | Scopus |
ISSN | 2755319 |
Abstract | High microcredit interest rates have often been a source of criticism against the microfinance movement. Research has focused attention on the cost structure of interest rates and more recently on the macroeconomic and macro-institutional factors. While cost structure is probably the most important determinant of interest rates, other factors can also matter. This paper uses an innovative measure of foreign exchange risk to explore its impact on microcredit interest rates. We show that microfinance institutions that operate in countries with fixed exchange rate regimes tend to charge lower interest rates than those operating in countries with floating exchange rate regimes. . |
Language | en |
Publisher | Elsevier Ltd |
Subject | Economic development Exchange risk F31 F63 Financial intermediation G12 G23 Interest rate Microfinance |
Type | Article |
Pagination | 520-531 |
Volume Number | 36 |
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