We have always heard about the limitations of the financial culture of microentrepreneurs, but we have never considered its likely impact on the interest rates charged. Precisely this article aims to demonstrate a supposed inverse relationship between financial culture and the interest rates charged to microentrepreneurs.
According to the theory, the interest rates charged by microcredit entities are determined based on five factors: financial costs, risk premium, operating costs, ROE and the market.
In the case of the market, its influence will depend on who holds the market power: yes, supply or demand.
On the supply side, its power will be inversely related to the number of microcredit companies participating in the market. Therefore, the fewer the microcredit entities, the greater the market power of the offer and vice versa. You, dear reader: what do you say? Will there be a sufficiently competitive number of microcredit entities? Have you reviewed the figures in other realities? The answer remains with you.
While on the demand side, its power will depend on the financial culture of the microentrepreneurs. The greater the financial culture of the microentrepreneurs, the greater the market power of demand and vice versa.
Precisely, to know the financial culture of microentrepreneurs and determine their probable market power and influence in determining the interest rates charged, the author of this note monitored a survey of a sample of 138 microentrepreneurs (with a 95% CI and d = 8%), users of a Trujillo microcredit institution.
The results of the survey showed that 35.46% did not know the interest rate charged, 82.22% did not know the difference between the annual effective interest rate and the annual effective cost, and 53.75% did not know all the commissions who paid and only 50% compared the interest rates of the competition.
Given these results, I wonder: will microentrepreneurs be in a position to influence the interest rates charged to them?
The answer is at the discretion of each one. But, definitely, if we want the situation to change, it will be necessary to carry out an arduous teaching task, in which the unions and associations of micro-entrepreneurs, professional associations, the Chamber of Commerce and above all, must make a commitment. the microentrepreneurs themselves. Only in this way, in my humble understanding, will there be a healthy equilibrium in the market and interest rates will tend to fall more fluidly.
