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Currency risk and microcredit interest rates.
- Source :
-
Emerging Markets Review . Jun2017, Vol. 31, p80-95. 16p. - Publication Year :
- 2017
-
Abstract
- Foreign currency debt provides additional access to capital and offers funds in favorable and flexible terms to microfinance institutions (MFIs). Yet, we find that the use of foreign currency debt, on average, leads to higher microcredit interest rates. We also find that MFIs operating in countries with pegged exchange rate regimes and profit MFIs are better able to mitigate foreign currency risk. The results of the paper suggest that local currency debt is a better option for MFIs if the goal is to provide microcredit at lower interest rates. [ABSTRACT FROM AUTHOR]
- Subjects :
- *FOREIGN exchange
*DEBT
*MICROFINANCE
*INTEREST rates
*FOREIGN exchange rates
Subjects
Details
- Language :
- English
- ISSN :
- 15660141
- Volume :
- 31
- Database :
- Academic Search Index
- Journal :
- Emerging Markets Review
- Publication Type :
- Academic Journal
- Accession number :
- 123133717
- Full Text :
- https://doi.org/10.1016/j.ememar.2017.03.001