Competition, loan rates, and information dispersion in nonprofit and for-profit microcredit markets

Research output: Contribution to journalArticle


External organisations

  • European School of Management and Technology - ESMT, Berlin
  • Université de Cergy-Pontoise - France


We describe the competitive environment of microcredit markets globally and we study the effects of competition on loan rates of microfinance institutions (MFIs). We use a new database from rating agencies, covering 379 for-profit and nonprofit MFIs in 67 countries over 2002–2008. Controlling for interest rate ceilings and other country-specific factors, we first find that nonprofits are relatively insensitive to industry-wide concentration changes, while for-profits charge significantly lower rates in less concentrated markets. Second, we find spillover effects between the for-profit and non-profit segments. Third, we show that the effects of concentration are consistent with an information dispersion mechanism.


Original languageEnglish
Pages (from-to)893-937
Number of pages45
JournalJournal of Money, Credit and Banking
Issue number5
Early online date23 May 2018
Publication statusPublished - Aug 2018


  • loan rates, bank competition, microfinance, information dispersion, nonprofit institutions