On the efficiency effects of subsidies in microfinance

Hudon, Marek; Traça, Daniel

http://hdl.handle.net/10362/61133

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Autores

Hudon, Marek

Traça, Daniel

Resumo(s)

Using an original database of rating agencies, this paper gives empirical evidence on the impact of subsidy intensity on the efficiency of Microfinance Institutions (MFIs). We find that subsidies have had a positive impact on efficiency, in the sense that MFIs that received subsidies are more efficient than those that do not. However, we find also that subsidization beyond a certain threshold renders the marginal effect on efficiency negative. In our sample, 26% of MFIs receive levels of subsidization higher than that threshold, which implies that a marginal cut on subsidy intensity would increase their efficiency.

Palavras-chave

Efficiency Microfinance Productivity Subsidies Geography, Planning and Development Development Sociology and Political Science Economics and Econometrics SDG 1 - No Poverty SDG 5 - Gender Equality SDG 8 - Decent Work and Economic Growth