Information, the Cost of Credit, and Operational Efficiency: An Empirical Study of Microfinance
We provide direct evidence on the impact of asymmetric information on both financing and operating activities through a study of credit evaluations of microfinance institutions (MFIs). We employ a regression discontinuity model that exploits the eligibility criteria of an evaluation subsidy offered...
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| Veröffentlicht in: | The Review of financial studies 2010-06, Vol.23 (6), p.2560-2590 |
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| container_end_page | 2590 |
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| container_title | The Review of financial studies |
| container_volume | 23 |
| creator | Garmaise, Mark J. Natividad, Gabriel |
| description | We provide direct evidence on the impact of asymmetric information on both financing and operating activities through a study of credit evaluations of microfinance institutions (MFIs). We employ a regression discontinuity model that exploits the eligibility criteria of an evaluation subsidy offered by a nonprofit consortium. Evaluations dramatically cut the cost of financing. This effect is strongest for commercial lenders and for short-term MFI-lender relationships. The impact of evaluations on the supply of finance is mixed. Evaluated MFIs lend more efficiently, extending more loans per employee. |
| doi_str_mv | 10.1093/rfs/hhq021 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0893-9454 |
| ispartof | The Review of financial studies, 2010-06, Vol.23 (6), p.2560-2590 |
| issn | 0893-9454 1465-7368 |
| language | eng |
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| source | EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; Oxford University Press Journals All Titles (1996-Current) |
| subjects | Asymmetric information Bank loans Commercial banks Commercial credit Cost efficiency Credit Credit ratings Debt Efficiency Impact analysis Information asymmetry Labour Lenders Loan financing Loans Microfinance Regression analysis Studies Subsidies Supply |
| title | Information, the Cost of Credit, and Operational Efficiency: An Empirical Study of Microfinance |
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