Economies of scope of lending and mobilizing deposits in microfinance institutions: A semiparametric analysis

Valentina Hartarska, Christopher Parmeter, Denis Nadolnyak

Research output: Contribution to journalArticle

23 Scopus citations

Abstract

Microfinance emerged as an innovation in lending to the rural poor in Asia and in response to frequent failure of previous interventions in rural financial markets, such as directed and subsidized production credit disbursed by agricultural development banks. Estimates show that there are at least 10,000 microfinance programs worldwide. Two related and important trends are now emerging. The analysis suggests that economies of scope are driven mostly by fixed cost sharing. The data were collected from the MIXMARKET database on November 1, 2008. Financial depth is the ratio of the money aggregate, including currency, deposits, and electronic currency (M3) over GDP and measures the level of financial development. Rural population is the proportion of people living in rural areas in the country in which the MFI operates, while population density is the number of people per square kilometer.

Original languageEnglish (US)
Pages (from-to)389-398
Number of pages10
JournalAmerican Journal of Agricultural Economics
Volume93
Issue number2
DOIs
StatePublished - Jan 1 2011
Externally publishedYes

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ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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