This paper investigates the dynamic effect of microcredit nominal interest rates and inflation, using a panel data of 315 microfinance institutions from 34 sub-Saharan African (SSA) countries over the period 2003 to 2011. To do so, we employ a panel vector autoregression (PVAR) model using efficient generalized method of moments (GMM) estimation as proposed by Blundell and Bond (1998). Apart from the full sample estimation, we further group our countries into three different income groups. Overall, the full sample estimation suggests that there is a negative relationship between inflation and microcredit nominal interest rates. The causality runs from inflation to microcredit nominal interest rates, whereas the reverse does not hold. Furthermore, the forecast error variances after 10 years have very low explanatory power for both microcredit nominal interest rates and inflation. Far more importantly, the significance of our study findings supports the Fisher effect (Fisher, 1930) and that microfinance lenders incorporate inflation into the microcredit interest rates. Additionally, moderation of persistently high inflation in the SSA region, ceteris paribus, could undoubtedly contribute to lowering the microcredit interest rates in SSA.

Abrigo, M.R.M. and Love, I. (2015) ‘Estimation of panel vector autoregression in Stata: a package of programs’, Stata Journal 16(3): 778–804.

Ahlin, C., Lin, J. and Maio, M. (2011) ‘Where does microfinance flourish? Microfinance institution performance in macroeconomic context’, Journal of Development Economics 95: 105–20 <https://doi.org/10.1016/j.jdeveco.2010.04.004>.

Arellano, M. and Bond, S. (1988) Dynamic Panel Data Estimation Using PPD: A Guide for Users, London: Institute for Fiscal Studies.

Arellano, M. and Bond, S. (1991) ‘Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations’, The Review of Economic Studies 58(2): 277–97.

Arellano, M. and Bover, O. (1995) ‘Another look at the instrumental variable estimation of error-components models’, Journal of Econometrics 68(1): 29–51 <https://doi.org/10.1016/0304-4076(94)01642-D>.

Asongu, S.A. (2013) ‘Fighting consumer price inflation in Africa: what do dynamics in money, credit, efficiency and size tell us?’ Journal of Financial Economic Policy 5(1): 39–60 <https://doi.org/10.1108/17576381311317772>.

Awomuse, B.O. and Alimi, S.R. (2012) ‘The relationship between nominal interest rates and inflation: new evidence and implications for Nigeria’, Journal of Economics and Sustainable Development 3(9): 158–64.

Baltagi, B. (2008) Econometric Analysis of Panel Data, Vol. 1, New York: John Wiley & Sons.

Barro, R.J. (2013) ‘Inflation and economic growth’, Annals of Economics and Finance 14(1): 121–44.

Beck, T. and Maimbo, S.M. (2012) Financial Sector Development in Africa (Directions in Development: Finance), Washington, DC: World Bank.

Berg, A., O’Connell, S., Pattillo, C., Portillo, R. and Unsal, F. (2015) ‘Monetary policy issues in sub-Saharan Africa’, The Oxford Handbook of Africa and Economics: Volume 2: Policies and Practices, pp. 62–87, Oxford, UK: Oxford University Press.

Blundell, R. and Bond, S. (1998) ‘Initial conditions and moment restrictions in dynamic panel data models’, Journal of Econometrics 87(1): 115–43 <https://doi.org/10.1016/S0304-4076(98)00009-8>.

Bodenstein, M., Guerrieri, L. and Gust, C.J. (2013) ‘Oil shocks and the zero bound on nominal interest rates’, Journal of International Money and Finance 32: 941–67 <https://doi.org/10.1016/j.jimonfin.2012.08.002>.

Booth, G.G. and Ciner, C. (2001) ‘The relationship between nominal interest rates and inflation: international evidence’, Journal of Multinational Financial Management 11(3): 269–80 <https://doi.org/10.1016/S1042-444X(01)00030-5>.

Bryan, M.F. and Cecchetti, S.G. (1993) ‘The consumer price index as a measure of inflation’, Economic Review of the Federal Reserve, Bank of Cleveland, 29(4), Quarter 4: 15–24.

Bullard, J. (1999) ‘Testing long-run monetary neutrality propositions: lessons from the recent research’, Federal Reserve Bank of St. Louis Review 81(1): 57–77.

Chikalipah, S. (2017) ‘Institutional environment and microfinance performance in sub-Saharan Africa’, African Development Review 29(1): 16–27 <http://dx.doi.org/10.1111/1467-8268.12235>.

Cotler, P. and Almazan, D. (2013) ‘The lending interest rates in the microfinance sector: searching for its determinants’, Journal of Centrum Cathedra 6(1): 69–81.

Crowder, W.J. and Hoffman, D.L. (1996) ‘The long-run relationship between nominal interest rates and inflation: the Fisher equation revisited’, Journal of Money, Credit and Banking 102–18 <http://dx.doi.org/10.2307/2077969>.

Dorfleitner, G., Leidl, M., Priberny, C. and von Mosch, J. (2013) ‘What determines microcredit interest rates?’ Applied Financial Economics 23(20): 1579–97 <http://dx.doi.org/10.1080/09603107.2013.839860>.

Eliot, G., Rothenberg, T.J. and Stock, J.H. (1996) ‘Efficient test for an autoregressive unit root’, Econometrica 64(4): 813–36 <http://dx.doi.org/10.2307/2171846>.

Fama, E.F. (1975) ‘Short-term interest rates as predictors of inflation’, The American Economic Review 65(3): 269–82.

Fisher, I. (1930) The Theory of Interest Rates, New York: Macmillan.

Garbade, K. and Wachtel, P. (1978) ‘Time variation in the relationship between inflation and interest rates’, Journal of Monetary Economics 4(4): 755–65 <https://doi.org/10.1016/0304-3932(78)90027-2>.

Hayakawa, K. (2015) ‘Improved GMM estimation of panel VAR models’, Computational Statistics & Data Analysis 100: 240–64 <https://doi.org/10.1016/j.csda.2015.05.004>.

Heintz, J. and Ndikumana, L. (2011) ‘Is there a case for formal inflation targeting in sub-Saharan Africa?’ Journal of African Economies 20(2): 67–103 <http://dx.doi.org/10.1093/jae/ejq027>.

Hermes, N. and Lensink, R. (2013) Financial Development and Economic Growth: Theory and Experiences from Developing Countries, Oxford, UK: Routledge.

Hsiao, C. (2014) Analysis of Panel Data, Vol. 54, Cambridge, UK: Cambridge University Press.

Janda, K. and Zetek, P. (2014) ‘Macroeconomic factors influencing interest rates of microfinance institutions in Latin America’, Agricultural Economics 60(4): 14.

Koutsomanoli-Filippaki, A. and Mamatzakis, E. (2009) ‘Performance and Merton-type default risk of listed banks in the EU: a panel VAR approach’, Journal of Banking & Finance 33(11): 2050–61 <https://doi.org/10.1016/j.jbankfin.2009.05.009>.

Love, I. and Zicchino, L. (2006) ‘Financial development and dynamic investment behavior: evidence from panel VAR’, The Quarterly Review of Economics and Finance 46(2): 190–210 <http://dx.doi.org/10.1016/j.qref.2005.11.007>.

Lütkepohl, H. (2005) New Introduction to Multiple Time Series Analysis, Berlin, Heidelberg: Springer Science & Business Media.

MacDonald, R. and Murphy, P.D. (1989) ‘Testing for the long run relationship between nominal interest rates and inflation using cointegration techniques’, Applied Economics 21(4): 439–47 <http://dx.doi.org/10.1080/758519711>.

Mishkin, F.S. (1992) ‘Is the Fisher effect for real? A reexamination of the relationship between inflation and interest rates’, Journal of Monetary Economics 30(2): 195–215 <https://doi.org/10.1016/0304-3932(92)90060-F>.

Roberts, P.W. (2013) ‘The profit orientation of microfinance institutions and effective interest rates’, World Development 41: 120–31 <http://dx.doi.org/10.1016/j.worlddev.2012.05.022>.

Rosenberg, R., Gaul, S., Ford, W. and Tomilova, O. (2013) Microcredit Interest Rates and Their Determinants: 2004–2011, Access to Finance Forum No. 7, Washington, DC: CGAP.

Sims, C.A. (1980) ‘Macroeconomics and reality’, Econometrica: Journal of the Econometric Society 48(1): 1–48 <http://dx.doi.org/10.2307/1912017>.

Sims, C.A. and Uhlig, H. (1991) ‘Understanding unit rooters: a helicopter tour’, Econometrica: Journal of the Econometric Society 59(6): 1591–9.

Westerlund, J. (2014) ‘Pooled panel unit root tests and the effect of past initialization’, Econometric Reviews (online), 1–32 <http://dx.doi.org/10.1080/07474938.2013.833829>.

Willard, L.B. (2012) ‘Does inflation targeting matter? A reassessment’, Applied Economics 44(17): 2231–44 <http://dx.doi.org/10.1080/00036846.2011.564136>.

World Bank (2012) ‘Economic indicators’, World Bank Research – Databank.

World Bank (2014) ‘Gross domestic savings (% of GDP)’ [online], World Bank data <http://data.worldbank.org/indicator/NY.GDS.TOTL.ZS>.

Abrigo, M.R.M. and Love, I. (2015) ‘Estimation of panel vector autoregression in Stata: a package of programs’, Stata Journal 16(3): 778–804.

Ahlin, C., Lin, J. and Maio, M. (2011) ‘Where does microfinance flourish? Microfinance institution performance in macroeconomic context’, Journal of Development Economics 95: 105–20 <https://doi.org/10.1016/j.jdeveco.2010.04.004>.

Arellano, M. and Bond, S. (1988) Dynamic Panel Data Estimation Using PPD: A Guide for Users, London: Institute for Fiscal Studies.

Arellano, M. and Bond, S. (1991) ‘Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations’, The Review of Economic Studies 58(2): 277–97.

Arellano, M. and Bover, O. (1995) ‘Another look at the instrumental variable estimation of error-components models’, Journal of Econometrics 68(1): 29–51 <https://doi.org/10.1016/0304-4076(94)01642-D>.

Asongu, S.A. (2013) ‘Fighting consumer price inflation in Africa: what do dynamics in money, credit, efficiency and size tell us?’ Journal of Financial Economic Policy 5(1): 39–60 <https://doi.org/10.1108/17576381311317772>.

Awomuse, B.O. and Alimi, S.R. (2012) ‘The relationship between nominal interest rates and inflation: new evidence and implications for Nigeria’, Journal of Economics and Sustainable Development 3(9): 158–64.

Baltagi, B. (2008) Econometric Analysis of Panel Data, Vol. 1, New York: John Wiley & Sons.

Barro, R.J. (2013) ‘Inflation and economic growth’, Annals of Economics and Finance 14(1): 121–44.

Beck, T. and Maimbo, S.M. (2012) Financial Sector Development in Africa (Directions in Development: Finance), Washington, DC: World Bank.

Berg, A., O’Connell, S., Pattillo, C., Portillo, R. and Unsal, F. (2015) ‘Monetary policy issues in sub-Saharan Africa’, The Oxford Handbook of Africa and Economics: Volume 2: Policies and Practices, pp. 62–87, Oxford, UK: Oxford University Press.

Blundell, R. and Bond, S. (1998) ‘Initial conditions and moment restrictions in dynamic panel data models’, Journal of Econometrics 87(1): 115–43 <https://doi.org/10.1016/S0304-4076(98)00009-8>.

Bodenstein, M., Guerrieri, L. and Gust, C.J. (2013) ‘Oil shocks and the zero bound on nominal interest rates’, Journal of International Money and Finance 32: 941–67 <https://doi.org/10.1016/j.jimonfin.2012.08.002>.

Booth, G.G. and Ciner, C. (2001) ‘The relationship between nominal interest rates and inflation: international evidence’, Journal of Multinational Financial Management 11(3): 269–80 <https://doi.org/10.1016/S1042-444X(01)00030-5>.

Bryan, M.F. and Cecchetti, S.G. (1993) ‘The consumer price index as a measure of inflation’, Economic Review of the Federal Reserve, Bank of Cleveland, 29(4), Quarter 4: 15–24.

Bullard, J. (1999) ‘Testing long-run monetary neutrality propositions: lessons from the recent research’, Federal Reserve Bank of St. Louis Review 81(1): 57–77.

Chikalipah, S. (2017) ‘Institutional environment and microfinance performance in sub-Saharan Africa’, African Development Review 29(1): 16–27 <http://dx.doi.org/10.1111/1467-8268.12235>.

Cotler, P. and Almazan, D. (2013) ‘The lending interest rates in the microfinance sector: searching for its determinants’, Journal of Centrum Cathedra 6(1): 69–81.

Crowder, W.J. and Hoffman, D.L. (1996) ‘The long-run relationship between nominal interest rates and inflation: the Fisher equation revisited’, Journal of Money, Credit and Banking 102–18 <http://dx.doi.org/10.2307/2077969>.

Dorfleitner, G., Leidl, M., Priberny, C. and von Mosch, J. (2013) ‘What determines microcredit interest rates?’ Applied Financial Economics 23(20): 1579–97 <http://dx.doi.org/10.1080/09603107.2013.839860>.

Eliot, G., Rothenberg, T.J. and Stock, J.H. (1996) ‘Efficient test for an autoregressive unit root’, Econometrica 64(4): 813–36 <http://dx.doi.org/10.2307/2171846>.

Fama, E.F. (1975) ‘Short-term interest rates as predictors of inflation’, The American Economic Review 65(3): 269–82.

Fisher, I. (1930) The Theory of Interest Rates, New York: Macmillan.

Garbade, K. and Wachtel, P. (1978) ‘Time variation in the relationship between inflation and interest rates’, Journal of Monetary Economics 4(4): 755–65 <https://doi.org/10.1016/0304-3932(78)90027-2>.

Hayakawa, K. (2015) ‘Improved GMM estimation of panel VAR models’, Computational Statistics & Data Analysis 100: 240–64 <https://doi.org/10.1016/j.csda.2015.05.004>.

Heintz, J. and Ndikumana, L. (2011) ‘Is there a case for formal inflation targeting in sub-Saharan Africa?’ Journal of African Economies 20(2): 67–103 <http://dx.doi.org/10.1093/jae/ejq027>.

Hermes, N. and Lensink, R. (2013) Financial Development and Economic Growth: Theory and Experiences from Developing Countries, Oxford, UK: Routledge.

Hsiao, C. (2014) Analysis of Panel Data, Vol. 54, Cambridge, UK: Cambridge University Press.

Janda, K. and Zetek, P. (2014) ‘Macroeconomic factors influencing interest rates of microfinance institutions in Latin America’, Agricultural Economics 60(4): 14.

Koutsomanoli-Filippaki, A. and Mamatzakis, E. (2009) ‘Performance and Merton-type default risk of listed banks in the EU: a panel VAR approach’, Journal of Banking & Finance 33(11): 2050–61 <https://doi.org/10.1016/j.jbankfin.2009.05.009>.

Love, I. and Zicchino, L. (2006) ‘Financial development and dynamic investment behavior: evidence from panel VAR’, The Quarterly Review of Economics and Finance 46(2): 190–210 <http://dx.doi.org/10.1016/j.qref.2005.11.007>.

Lütkepohl, H. (2005) New Introduction to Multiple Time Series Analysis, Berlin, Heidelberg: Springer Science & Business Media.

MacDonald, R. and Murphy, P.D. (1989) ‘Testing for the long run relationship between nominal interest rates and inflation using cointegration techniques’, Applied Economics 21(4): 439–47 <http://dx.doi.org/10.1080/758519711>.

Mishkin, F.S. (1992) ‘Is the Fisher effect for real? A reexamination of the relationship between inflation and interest rates’, Journal of Monetary Economics 30(2): 195–215 <https://doi.org/10.1016/0304-3932(92)90060-F>.

Roberts, P.W. (2013) ‘The profit orientation of microfinance institutions and effective interest rates’, World Development 41: 120–31 <http://dx.doi.org/10.1016/j.worlddev.2012.05.022>.

Rosenberg, R., Gaul, S., Ford, W. and Tomilova, O. (2013) Microcredit Interest Rates and Their Determinants: 2004–2011, Access to Finance Forum No. 7, Washington, DC: CGAP.

Sims, C.A. (1980) ‘Macroeconomics and reality’, Econometrica: Journal of the Econometric Society 48(1): 1–48 <http://dx.doi.org/10.2307/1912017>.

Sims, C.A. and Uhlig, H. (1991) ‘Understanding unit rooters: a helicopter tour’, Econometrica: Journal of the Econometric Society 59(6): 1591–9.

Westerlund, J. (2014) ‘Pooled panel unit root tests and the effect of past initialization’, Econometric Reviews (online), 1–32 <http://dx.doi.org/10.1080/07474938.2013.833829>.

Willard, L.B. (2012) ‘Does inflation targeting matter? A reassessment’, Applied Economics 44(17): 2231–44 <http://dx.doi.org/10.1080/00036846.2011.564136>.

World Bank (2012) ‘Economic indicators’, World Bank Research – Databank.

World Bank (2014) ‘Gross domestic savings (% of GDP)’ [online], World Bank data <http://data.worldbank.org/indicator/NY.GDS.TOTL.ZS>.

Abrigo, M.R.M. and Love, I. (2015) ‘Estimation of panel vector autoregression in Stata: a package of programs’, Stata Journal 16(3): 778–804.

Ahlin, C., Lin, J. and Maio, M. (2011) ‘Where does microfinance flourish? Microfinance institution performance in macroeconomic context’, Journal of Development Economics 95: 105–20 <https://doi.org/10.1016/j.jdeveco.2010.04.004>.

Arellano, M. and Bond, S. (1988) Dynamic Panel Data Estimation Using PPD: A Guide for Users, London: Institute for Fiscal Studies.

Arellano, M. and Bond, S. (1991) ‘Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations’, The Review of Economic Studies 58(2): 277–97.

Arellano, M. and Bover, O. (1995) ‘Another look at the instrumental variable estimation of error-components models’, Journal of Econometrics 68(1): 29–51 <https://doi.org/10.1016/0304-4076(94)01642-D>.

Asongu, S.A. (2013) ‘Fighting consumer price inflation in Africa: what do dynamics in money, credit, efficiency and size tell us?’ Journal of Financial Economic Policy 5(1): 39–60 <https://doi.org/10.1108/17576381311317772>.

Awomuse, B.O. and Alimi, S.R. (2012) ‘The relationship between nominal interest rates and inflation: new evidence and implications for Nigeria’, Journal of Economics and Sustainable Development 3(9): 158–64.

Baltagi, B. (2008) Econometric Analysis of Panel Data, Vol. 1, New York: John Wiley & Sons.

Barro, R.J. (2013) ‘Inflation and economic growth’, Annals of Economics and Finance 14(1): 121–44.

Beck, T. and Maimbo, S.M. (2012) Financial Sector Development in Africa (Directions in Development: Finance), Washington, DC: World Bank.

Berg, A., O’Connell, S., Pattillo, C., Portillo, R. and Unsal, F. (2015) ‘Monetary policy issues in sub-Saharan Africa’, The Oxford Handbook of Africa and Economics: Volume 2: Policies and Practices, pp. 62–87, Oxford, UK: Oxford University Press.

Blundell, R. and Bond, S. (1998) ‘Initial conditions and moment restrictions in dynamic panel data models’, Journal of Econometrics 87(1): 115–43 <https://doi.org/10.1016/S0304-4076(98)00009-8>.

Bodenstein, M., Guerrieri, L. and Gust, C.J. (2013) ‘Oil shocks and the zero bound on nominal interest rates’, Journal of International Money and Finance 32: 941–67 <https://doi.org/10.1016/j.jimonfin.2012.08.002>.

Booth, G.G. and Ciner, C. (2001) ‘The relationship between nominal interest rates and inflation: international evidence’, Journal of Multinational Financial Management 11(3): 269–80 <https://doi.org/10.1016/S1042-444X(01)00030-5>.

Bryan, M.F. and Cecchetti, S.G. (1993) ‘The consumer price index as a measure of inflation’, Economic Review of the Federal Reserve, Bank of Cleveland, 29(4), Quarter 4: 15–24.

Bullard, J. (1999) ‘Testing long-run monetary neutrality propositions: lessons from the recent research’, Federal Reserve Bank of St. Louis Review 81(1): 57–77.

Chikalipah, S. (2017) ‘Institutional environment and microfinance performance in sub-Saharan Africa’, African Development Review 29(1): 16–27 <http://dx.doi.org/10.1111/1467-8268.12235>.

Cotler, P. and Almazan, D. (2013) ‘The lending interest rates in the microfinance sector: searching for its determinants’, Journal of Centrum Cathedra 6(1): 69–81.

Crowder, W.J. and Hoffman, D.L. (1996) ‘The long-run relationship between nominal interest rates and inflation: the Fisher equation revisited’, Journal of Money, Credit and Banking 102–18 <http://dx.doi.org/10.2307/2077969>.

Dorfleitner, G., Leidl, M., Priberny, C. and von Mosch, J. (2013) ‘What determines microcredit interest rates?’ Applied Financial Economics 23(20): 1579–97 <http://dx.doi.org/10.1080/09603107.2013.839860>.

Eliot, G., Rothenberg, T.J. and Stock, J.H. (1996) ‘Efficient test for an autoregressive unit root’, Econometrica 64(4): 813–36 <http://dx.doi.org/10.2307/2171846>.

Fama, E.F. (1975) ‘Short-term interest rates as predictors of inflation’, The American Economic Review 65(3): 269–82.

Fisher, I. (1930) The Theory of Interest Rates, New York: Macmillan.

Garbade, K. and Wachtel, P. (1978) ‘Time variation in the relationship between inflation and interest rates’, Journal of Monetary Economics 4(4): 755–65 <https://doi.org/10.1016/0304-3932(78)90027-2>.

Hayakawa, K. (2015) ‘Improved GMM estimation of panel VAR models’, Computational Statistics & Data Analysis 100: 240–64 <https://doi.org/10.1016/j.csda.2015.05.004>.

Heintz, J. and Ndikumana, L. (2011) ‘Is there a case for formal inflation targeting in sub-Saharan Africa?’ Journal of African Economies 20(2): 67–103 <http://dx.doi.org/10.1093/jae/ejq027>.

Hermes, N. and Lensink, R. (2013) Financial Development and Economic Growth: Theory and Experiences from Developing Countries, Oxford, UK: Routledge.

Hsiao, C. (2014) Analysis of Panel Data, Vol. 54, Cambridge, UK: Cambridge University Press.

Janda, K. and Zetek, P. (2014) ‘Macroeconomic factors influencing interest rates of microfinance institutions in Latin America’, Agricultural Economics 60(4): 14.

Koutsomanoli-Filippaki, A. and Mamatzakis, E. (2009) ‘Performance and Merton-type default risk of listed banks in the EU: a panel VAR approach’, Journal of Banking & Finance 33(11): 2050–61 <https://doi.org/10.1016/j.jbankfin.2009.05.009>.

Love, I. and Zicchino, L. (2006) ‘Financial development and dynamic investment behavior: evidence from panel VAR’, The Quarterly Review of Economics and Finance 46(2): 190–210 <http://dx.doi.org/10.1016/j.qref.2005.11.007>.

Lütkepohl, H. (2005) New Introduction to Multiple Time Series Analysis, Berlin, Heidelberg: Springer Science & Business Media.

MacDonald, R. and Murphy, P.D. (1989) ‘Testing for the long run relationship between nominal interest rates and inflation using cointegration techniques’, Applied Economics 21(4): 439–47 <http://dx.doi.org/10.1080/758519711>.

Mishkin, F.S. (1992) ‘Is the Fisher effect for real? A reexamination of the relationship between inflation and interest rates’, Journal of Monetary Economics 30(2): 195–215 <https://doi.org/10.1016/0304-3932(92)90060-F>.

Roberts, P.W. (2013) ‘The profit orientation of microfinance institutions and effective interest rates’, World Development 41: 120–31 <http://dx.doi.org/10.1016/j.worlddev.2012.05.022>.

Rosenberg, R., Gaul, S., Ford, W. and Tomilova, O. (2013) Microcredit Interest Rates and Their Determinants: 2004–2011, Access to Finance Forum No. 7, Washington, DC: CGAP.

Sims, C.A. (1980) ‘Macroeconomics and reality’, Econometrica: Journal of the Econometric Society 48(1): 1–48 <http://dx.doi.org/10.2307/1912017>.

Sims, C.A. and Uhlig, H. (1991) ‘Understanding unit rooters: a helicopter tour’, Econometrica: Journal of the Econometric Society 59(6): 1591–9.

Westerlund, J. (2014) ‘Pooled panel unit root tests and the effect of past initialization’, Econometric Reviews (online), 1–32 <http://dx.doi.org/10.1080/07474938.2013.833829>.

Willard, L.B. (2012) ‘Does inflation targeting matter? A reassessment’, Applied Economics 44(17): 2231–44 <http://dx.doi.org/10.1080/00036846.2011.564136>.

World Bank (2012) ‘Economic indicators’, World Bank Research – Databank.

World Bank (2014) ‘Gross domestic savings (% of GDP)’ [online], World Bank data <http://data.worldbank.org/indicator/NY.GDS.TOTL.ZS>.

Abrigo, M.R.M. and Love, I. (2015) ‘Estimation of panel vector autoregression in Stata: a package of programs’, Stata Journal 16(3): 778–804.

Ahlin, C., Lin, J. and Maio, M. (2011) ‘Where does microfinance flourish? Microfinance institution performance in macroeconomic context’, Journal of Development Economics 95: 105–20 <https://doi.org/10.1016/j.jdeveco.2010.04.004>.

Arellano, M. and Bond, S. (1988) Dynamic Panel Data Estimation Using PPD: A Guide for Users, London: Institute for Fiscal Studies.

Arellano, M. and Bond, S. (1991) ‘Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations’, The Review of Economic Studies 58(2): 277–97.

Arellano, M. and Bover, O. (1995) ‘Another look at the instrumental variable estimation of error-components models’, Journal of Econometrics 68(1): 29–51 <https://doi.org/10.1016/0304-4076(94)01642-D>.

Asongu, S.A. (2013) ‘Fighting consumer price inflation in Africa: what do dynamics in money, credit, efficiency and size tell us?’ Journal of Financial Economic Policy 5(1): 39–60 <https://doi.org/10.1108/17576381311317772>.

Awomuse, B.O. and Alimi, S.R. (2012) ‘The relationship between nominal interest rates and inflation: new evidence and implications for Nigeria’, Journal of Economics and Sustainable Development 3(9): 158–64.

Baltagi, B. (2008) Econometric Analysis of Panel Data, Vol. 1, New York: John Wiley & Sons.

Barro, R.J. (2013) ‘Inflation and economic growth’, Annals of Economics and Finance 14(1): 121–44.

Beck, T. and Maimbo, S.M. (2012) Financial Sector Development in Africa (Directions in Development: Finance), Washington, DC: World Bank.

Berg, A., O’Connell, S., Pattillo, C., Portillo, R. and Unsal, F. (2015) ‘Monetary policy issues in sub-Saharan Africa’, The Oxford Handbook of Africa and Economics: Volume 2: Policies and Practices, pp. 62–87, Oxford, UK: Oxford University Press.

Blundell, R. and Bond, S. (1998) ‘Initial conditions and moment restrictions in dynamic panel data models’, Journal of Econometrics 87(1): 115–43 <https://doi.org/10.1016/S0304-4076(98)00009-8>.

Bodenstein, M., Guerrieri, L. and Gust, C.J. (2013) ‘Oil shocks and the zero bound on nominal interest rates’, Journal of International Money and Finance 32: 941–67 <https://doi.org/10.1016/j.jimonfin.2012.08.002>.

Booth, G.G. and Ciner, C. (2001) ‘The relationship between nominal interest rates and inflation: international evidence’, Journal of Multinational Financial Management 11(3): 269–80 <https://doi.org/10.1016/S1042-444X(01)00030-5>.

Bryan, M.F. and Cecchetti, S.G. (1993) ‘The consumer price index as a measure of inflation’, Economic Review of the Federal Reserve, Bank of Cleveland, 29(4), Quarter 4: 15–24.

Bullard, J. (1999) ‘Testing long-run monetary neutrality propositions: lessons from the recent research’, Federal Reserve Bank of St. Louis Review 81(1): 57–77.

Chikalipah, S. (2017) ‘Institutional environment and microfinance performance in sub-Saharan Africa’, African Development Review 29(1): 16–27 <http://dx.doi.org/10.1111/1467-8268.12235>.

Cotler, P. and Almazan, D. (2013) ‘The lending interest rates in the microfinance sector: searching for its determinants’, Journal of Centrum Cathedra 6(1): 69–81.

Crowder, W.J. and Hoffman, D.L. (1996) ‘The long-run relationship between nominal interest rates and inflation: the Fisher equation revisited’, Journal of Money, Credit and Banking 102–18 <http://dx.doi.org/10.2307/2077969>.

Dorfleitner, G., Leidl, M., Priberny, C. and von Mosch, J. (2013) ‘What determines microcredit interest rates?’ Applied Financial Economics 23(20): 1579–97 <http://dx.doi.org/10.1080/09603107.2013.839860>.

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