Does Efficiency Lead to Lower Prices? A New Perspective from Microfinance Interest Rates

摘要

In microfinance, high interest rates are a topic of intense debate urging accounting for their motivation. This article contributes to the debate by providing empirical evidence of the impact that the efficiency of an MFI has on its microcredit interest rate. The data envelopment analysis framework is used to estimate financial and social efficiency. The financial efficiency of MFIs has helped to reduce microcredit interest rates. There is, however, no impact of social efficiency on interest rates.