An analysis of transaction costs of Islamic banks in rural Iran
This study measures transaction costs of obtaining credit from Islamic banks. Data were collected from rural households in Iran. The factors affecting transaction costs and the probability of accessing Islamic financial markets are investigated. Similar to conventional financial institutions found in other developing countries, Iranian banks impose high transaction costs that limit poor rural household access to credit. The results reveal that the transaction costs of gaining credit are on average equivalent to an additional 13.8% annual interest cost. The contractual form, the size of credit, the borrower distance from a financial center, and the experience and education level of the borrower are important determinants of the transactions costs. [EconLit Citations: D230, R510, G210]. © 2009 Wiley Periodicals, Inc.
Volume (Year): 25 (2009)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Saito, Katrine Anderson & Villanueva, Delano P, 1981. "Transaction Costs of Credit to the Small-Scale Sector in the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 29(3), pages 631-40, April.
- Adams, Dale W. & Vogel, Robert C., 1986. "Rural financial markets in low-income countries: Recent controversies and lessons," World Development, Elsevier, vol. 14(4), pages 477-487, April.
- Aggarwal, Rajesh K & Yousef, Tarik, 2000. "Islamic Banks and Investment Financing," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(1), pages 93-120, February.
- Untalan, Teodoro S. & Cuevas, Carlos E., 1989. "Transaction Cost and the Viability of Rural Financial Intermediaries," Philippine Journal of Development JPD 1989 Vol. XVI No.1-b, Philippine Institute for Development Studies.
- Adams, Dale W., 1982. "Physical Examinations for Rural Financial Markets in Low Income Countries," Research Bulletins 181958, Cornell University, Department of Applied Economics and Management.
- John Freebairn & Bill Griffiths, 2006. "Introduction," The Economic Record, The Economic Society of Australia, vol. 82(s1), pages S1-S1, 09.
- Liedholm, Carl, 1985. "Small Scale Enterprise Credit Schemes: Administrative Costs and the Role of Inventory Norms," Food Security International Development Working Papers 54746, Michigan State University, Department of Agricultural, Food, and Resource Economics.
When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:25:y:2009:i:3:p:291-313. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.