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The Impact of Social Beliefs on Microfinance Performance
Author(s) -
Burzynska Katarzyna,
Berggren Olle
Publication year - 2015
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3053
Subject(s) - microfinance , collectivism , panel data , economics , business , financial system , development economics , economic growth , market economy , econometrics , individualism
We apply a panel of 331 microfinance institutions from 37 countries to investigate the relationship between social beliefs and microfinance financial performance over the period of 2003–2011. We find that microfinance institutions in countries with higher levels of trust and more collectivist culture have lower operating and default costs and charge lower interest rates. These results provide the first large cross‐country evidence that social beliefs are important determinants of microfinance performance. Copyright © 2014 John Wiley & Sons, Ltd.