Differences in the interest rates of microfinance institutions in some markets economies: An HLM approach

  • Adriana Ramírez Rocha Tecnológico de Monterrey
  • L. Arturo Bernal Ponce Tecnológico de Monterrey
  • Mauricio Cervantes Zepeda Tecnológico de Monterrey
Keywords: microfinance institutions, IMFs interest rates, hierarchical linear modeling, government effectiveness, emerging markets economies
JEL Classification: G21, E43, C55


In this study, we analyzed the differences in the interest rates of microfinance institutions (MFIs) of some countries in Latin America, Africa, Eastern Europe and Asia. We found that the operating expenses are essential drivers of these interest rates. We also found that operating expenses, average loan per borrower, real growth GDP, and government effectiveness, are key factors that explain differences in interest rates. We use apply Hierarchical Linear Modeling (HLM) to analyze these differences.


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