Economic policy uncertainty and credit risk in microfinance: A cross‐country analysis
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Wiley Open Access
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| Natura: | Artículo Open Access |
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Wiley
2024
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| _version_ | 1867008966105497600 |
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| author | Mufang Xie |
| author_facet | Mufang Xie Mufang Xie |
| collection | Wiley Open Access |
| contents | Economic policy uncertainty and credit risk in microfinance: A cross‐country analysis Mufang Xie International Journal of Finance & Economics AbstractUsing a cross‐country data set of 670 microfinance institutions (MFIs) in nine countries from 1999 to 2018, this study examines the impact of economic policy uncertainty (EPU) on the credit risk of MFIs. The empirical results show that EPU significantly increases the credit risk of MFIs. Our findings are valid in a series of robustness checks. The moderating effects reveal that group lending can mitigate the impact of EPU on the credit risk of MFIs and that EPU has a weaker impact on nongovernmental organizations (NGOs) and cooperatives and credit unions (Coop/CUs). We explore potential channels through which credit risk is influenced by EPU from the perspectives of earnings volatility and cost. We find that EPU increases the credit risk of MFIs not only by reducing profitability and leverage levels and increasing earnings volatility but also by raising financing costs. 10.1002/ijfe.3003 http://onlinelibrary.wiley.com/termsAndConditions#vor |
| doi_str_mv | 10.1002/ijfe.3003 |
| format | Artículo Open Access |
| id | wiley_oa_10_1002_ijfe_3003 |
| institution | Wiley Open Access |
| license_str_mv | http://onlinelibrary.wiley.com/termsAndConditions#vor |
| publishDate | 2024 |
| publisher | Wiley |
| record_format | wiley_oa |
| spellingShingle | Economic policy uncertainty and credit risk in microfinance: A cross‐country analysis Mufang Xie International Journal of Finance & Economics Economic policy uncertainty and credit risk in microfinance: A cross‐country analysis Mufang Xie International Journal of Finance & Economics AbstractUsing a cross‐country data set of 670 microfinance institutions (MFIs) in nine countries from 1999 to 2018, this study examines the impact of economic policy uncertainty (EPU) on the credit risk of MFIs. The empirical results show that EPU significantly increases the credit risk of MFIs. Our findings are valid in a series of robustness checks. The moderating effects reveal that group lending can mitigate the impact of EPU on the credit risk of MFIs and that EPU has a weaker impact on nongovernmental organizations (NGOs) and cooperatives and credit unions (Coop/CUs). We explore potential channels through which credit risk is influenced by EPU from the perspectives of earnings volatility and cost. We find that EPU increases the credit risk of MFIs not only by reducing profitability and leverage levels and increasing earnings volatility but also by raising financing costs. 10.1002/ijfe.3003 http://onlinelibrary.wiley.com/termsAndConditions#vor |
| title | Economic policy uncertainty and credit risk in microfinance: A cross‐country analysis |
| topic | International Journal of Finance & Economics |
| url | https://onlinelibrary.wiley.com/doi/10.1002/ijfe.3003 |