Tag
credit_guarantees
2 findings
Finance & microfinanceTargeted Microfinance Risk SubsidiesA targeted public subsidy of Rs 150 per borrower renders microfinance lenders indifferent between classic and grace period contracts at standard 17.5% APR interest rates, generating an estimated annual social return on public capital of 178% based on an average monthly profit gain of Rs 287 per client.Expert TheoryFinance & microfinanceSubsidized Flexible Small Business DebtU.S. SBA small business loans offer flexible terms (including delayed initial payments up to 3 months) and tolerate default rates of 13% to 15% (compared to 2% to 5% for typical microfinance institutions) supported by public guarantees.Observational Study