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An ethical barrier to Japanese funding of microfinance institutions in developing countries

Author

Listed:
  • Takashi Ishida
  • Mototsugu Fukushige

    (Osaka University)

Abstract

Some microfinance institutions (MFI) charge very high interest rates to borrowers in developing countries. However, in Japan, domestic laws regulate the interest rate ceiling for lending. Thus, when Japanese people consider providing funding to MFI, an ethical conflict may emerge. We conduct a questionnaire survey and find that some Japanese consider that funding financial institutions that charge high interest rates is incorrect from an ethical point of view. An additional probit analysis indicates that income and age affect the attitudes toward high interest rates.

Suggested Citation

  • Takashi Ishida & Mototsugu Fukushige, 2019. "An ethical barrier to Japanese funding of microfinance institutions in developing countries," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 9(1), pages 1-21.
    • Handle: RePEc:afj:journ3:v:9:y:2019:i:1:p:1-21
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    File URL: https://journals.co.za/content/journal/10520/EJC-17ce4f4628
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    More about this item

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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