2023 Fiscal Year Final Research Report
Research on the Factors Driving Financial Over-Indebtedness and the Impacts of the Interest Rate Ceiling on the Microfinance Sector: The Cambodian Case and International Comparison Analysis
| Project/Area Number |
18K01604
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Multi-year Fund |
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| Section | 一般 |
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| Review Section |
Basic Section 07040:Economic policy-related
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| Research Institution | Saitama University |
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Principal Investigator |
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| Project Period (FY) |
2018-04-01 – 2024-03-31
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| Keywords | Interest rate ceiling, / Microfinance, / Financial inclusion, / Debt burden |
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| Outline of Final Research Achievements |
Based on the analysis of data and information from field surveys and relevant institutions, our research found that the imposition of the interest rate ceiling has led to a decline in the average credit costs for microfinance borrowing households. However, the ceiling imposition could result in credit rationing for relatively low-income households. This result is consistent with international experience. The research also confirmed an increase in the average loan amount for relatively low loan amounts. The analysis indicated that higher loan amounts resulted in a higher debt burden (measured as the debt service-to-income ratio). Consequently, for households with relatively small borrowing amounts, the debt burden may have increased after the ceiling imposition. Our research also confirmed the important role of financial literacy in reducing the debt burden among microfinance borrowers.
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| Free Research Field |
経済学
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| Academic Significance and Societal Importance of the Research Achievements |
This study contributed to the literature by providing new evidence on the impact of the interest rate ceiling on the microfinance sector in a developing economy. It also provided implications for policymakers regarding the balance between protecting borrowers and enhancing the microfinance sector.
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