CGAP study: Microcredit Interest Rates and Their Determinants

Microcredit Interest Rates and Their Determinants finds that the operating costs of MFIs remain the largest determinant of microcredit interest rates.

The percentage of borrowers’ interest payments that went to microlenders’ profits also dropped from about 20 percent in 2004 to 10 percent in 2011. During the same time, funding costs have climbed as microlenders fund more of their portfolio from commercial borrowing. 

An interactive data set offered by MIX supports this new paper and provides more than 800 data cuts that allow users to slice data for their needs and download the results. The online database, available on the website MIXMarket.org, is especially practical for users looking to customize data for a specific region or country.