The Impact of Social Beliefs on Microfinance Performance

[Photo by Francesco Gallarotti on Unsplash]

Abstract

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.

Publication
Journal of International Development 27(7)
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Katarzyna Burzynska
Assistant Professor of Business Economics

My research interests include interorganizational networks, social network analysis, institutional economics and China.