Driouchi, Ahmed and Mertou, Amat (2012): High Implicit Interest Rates in the Context of Informal Traditional Housing Transactions: Evidence from Morocco.
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Abstract: The objective of this research is to investigate the situation of the poor in Morocco through assessing the implicit charges of informal housing transactions in different cities. A model allowing the calculation of the implicit interest rate from the traditional-mortgage transactions is applied. Data about traditional-mortgage housing transactions, duration, and rental values are collected from a sample of households in different cities. The results reveal that these transactions are costly although they involve small amounts of money. On average, a rate higher than 6% but lower than 50 % is implicitly implied in traditional-mortgage transactions. The overall results confirm that poor households are implicitly charged higher interest rates in their housing transactions in comparison with the explicit rates charged by formal credit markets, including microfinance. This implies that administrative and economic policies are to be further developed to ensure that poor households can easily access formal credit markets.
|Item Type:||MPRA Paper|
|Original Title:||High Implicit Interest Rates in the Context of Informal Traditional Housing Transactions: Evidence from Morocco|
|English Title:||High Implicit Interest Rates in the Context of Informal Traditional Housing Transactions: Evidence from Morocco|
|Keywords:||Keywords: Implicit interest rate- Informal Traditional Housing- Poverty-Morocco|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
|Depositing User:||Ahmed Driouchi|
|Date Deposited:||11. May 2012 04:53|
|Last Modified:||13. Feb 2013 07:33|
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