Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico

This paper studies the impact of a program that provides grants for technical assistance on the interest rates and outreach of credit unions in Mexico. Credit unions financing rural borrowers received grants in different years. The study uses prope...

Full description

Bibliographic Details
Main Authors: Bruhn, Miriam, Reddy, Rekha, Ruiz Ortega, Claudia
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2018
Subjects:
Online Access:http://documents.worldbank.org/curated/en/591351529583939227/Sowing-the-seeds-for-rural-finance-the-impact-of-support-services-for-credit-unions-in-Mexico
http://hdl.handle.net/10986/29936
id okr-10986-29936
recordtype oai_dc
spelling okr-10986-299362021-06-08T14:42:46Z Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico Bruhn, Miriam Reddy, Rekha Ruiz Ortega, Claudia CREDIT UNION RURAL FINANCE TECHNICAL ASSISTANCE ACCESS TO FINANCE SMALL AND MEDIUM ENTERPRISES PROPENSITY SCORE MATCHING LENDING INTEREST RATE RISK MANAGEMENT NON-PERFORMING LOANS This paper studies the impact of a program that provides grants for technical assistance on the interest rates and outreach of credit unions in Mexico. Credit unions financing rural borrowers received grants in different years. The study uses propensity score matching and relies additionally on the timing of the grants to identify effects. The analysis shows that the program lowered lending interest rates by up to 2.6 percentage points (from a pre-program average of 17.8 percent). This drop appears to be due to lower operating costs and better risk management, as reflected in a lower nonperforming loan ratio. The program also raised credit unions' returns on assets and significantly increased the value of their loan portfolio. 2018-06-28T14:27:37Z 2018-06-28T14:27:37Z 2018-06 Working Paper http://documents.worldbank.org/curated/en/591351529583939227/Sowing-the-seeds-for-rural-finance-the-impact-of-support-services-for-credit-unions-in-Mexico http://hdl.handle.net/10986/29936 English Policy Research Working Paper;No. 8483 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Mexico
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CREDIT UNION
RURAL FINANCE
TECHNICAL ASSISTANCE
ACCESS TO FINANCE
SMALL AND MEDIUM ENTERPRISES
PROPENSITY SCORE MATCHING
LENDING INTEREST RATE
RISK MANAGEMENT
NON-PERFORMING LOANS
spellingShingle CREDIT UNION
RURAL FINANCE
TECHNICAL ASSISTANCE
ACCESS TO FINANCE
SMALL AND MEDIUM ENTERPRISES
PROPENSITY SCORE MATCHING
LENDING INTEREST RATE
RISK MANAGEMENT
NON-PERFORMING LOANS
Bruhn, Miriam
Reddy, Rekha
Ruiz Ortega, Claudia
Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico
geographic_facet Latin America & Caribbean
Mexico
relation Policy Research Working Paper;No. 8483
description This paper studies the impact of a program that provides grants for technical assistance on the interest rates and outreach of credit unions in Mexico. Credit unions financing rural borrowers received grants in different years. The study uses propensity score matching and relies additionally on the timing of the grants to identify effects. The analysis shows that the program lowered lending interest rates by up to 2.6 percentage points (from a pre-program average of 17.8 percent). This drop appears to be due to lower operating costs and better risk management, as reflected in a lower nonperforming loan ratio. The program also raised credit unions' returns on assets and significantly increased the value of their loan portfolio.
format Working Paper
author Bruhn, Miriam
Reddy, Rekha
Ruiz Ortega, Claudia
author_facet Bruhn, Miriam
Reddy, Rekha
Ruiz Ortega, Claudia
author_sort Bruhn, Miriam
title Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico
title_short Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico
title_full Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico
title_fullStr Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico
title_full_unstemmed Sowing the Seeds for Rural Finance : The Impact of Support Services for Credit Unions in Mexico
title_sort sowing the seeds for rural finance : the impact of support services for credit unions in mexico
publisher World Bank, Washington, DC
publishDate 2018
url http://documents.worldbank.org/curated/en/591351529583939227/Sowing-the-seeds-for-rural-finance-the-impact-of-support-services-for-credit-unions-in-Mexico
http://hdl.handle.net/10986/29936
_version_ 1764470849433239552