Knut Wicksell Working Paper Series, Knut Wicksell Centre for Financial Studies, Lund University
Olle Berggren and Katarzyna Burzynska
The Impact of Social Beliefs on Microfinance Performance
Abstract: We apply a panel of 331 microfinance institutions from 37
countries to investigate the relationship between social beliefs and
microfinance financial performance. 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.
Keywords: microfinance; performance; informal institutions; trust; collectivism; (follow links to similar papers)
JEL-Codes: G21; O16; O17; O43; O50; (follow links to similar papers)
47 pages, September 30, 2014
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