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Download the Paper (298 K, PDF file) - April 12, 2005 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
We present a simple, easy to implement methodology for pricing microfinance loans and loan guarantees using publicly available data on loan write-offs by Micro Finance Institutions (MFIs). Our methodology takes into account the selection bias inherent in available data in that MFIs that do not report loan write-off data are less likely to be better performers. Our quantitative analysis is consistent with pricing seen in a recent securitization deal. Our analysis suggests how securitization and loan guarantees can greatly expand the supply of funds for microfinance loans.

SUGGESTED CITATION:
Bhagwan Chowdhry, David Cassell, James B. Gamett, Gary J. Milkwick, Chad D. Nielsen, and Jon D. Sederstrom, "Pricing Microfinance Loans and Loan Guarantees using Biased Loan Write-off Data" (April 12, 2005). Finance. Paper 11-05.
http://repositories.cdlib.org/anderson/fin/11-05