Political Conditions to Make Microfinance Work Well

2019 Fiscal Year Final Research Report

• Project/Area Number: 17K03805
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Money/ Finance
• Research Institution: Meijo University (2019); Okayama University (2017-2018)
• Principal Investigator: Nishigaki Narunto 名城大学, 経営学部, 教授 (40283387)
• Project Period (FY): 2017-04-01 – 2020-03-31
• Keywords: マイクロクレジット / アウトリーチ / ゲーム理論 / エージェンシー問題 / デフォルト・ペナルティ

Outline of Final Research Achievements

There are widely divergent views on how to estimate the results of poverty alleviation efforts of microfinance. One of these differences stems from opinions regarding the interest rates. High rates proponents tend to emphasize that more lenders will enter the market and more profit-led investors are willing to provide their money to the lenders. On the other hand, opponents of high rates say that reducing “cost” for the poor is a priority, and these costs include interest rates.
The most characteristic aspect of our study is to emphasize the trade-off between “reach” and “cost”; while raising rates increases the reach of credit, the interest cost imposes a heavier burden on the poor. And using a game theory, we revealed the fact that too much raising of interest rates also deteriorates repayment rates. Thus, we reach a conclusion that regulatory authorities should find their optimum (not too low but fair) rates of interest of each country.

Free Research Field

金融ファイナンス

Academic Significance and Societal Importance of the Research Achievements

学術的貢献として、従来融資金利について高金利肯定か否定かの二分論しかなかったマイクロファイナンス研究で「低すぎてもいけないし高すぎてもいけない」という新しい適正性という考え方を提示したこと。
社会的意義について、金利について全く規制のない状態、および行きすぎた低金利規制の状態、そのいずれも望ましくないことを政策当局に対して示したこと。