# Table 2. Average loan size, per capita GNI (MFI-level regression)

P-values are in brackets. *, **, *** represent statistical significance at the 10%, 5%, and 1% level respectively. Standards errors allow for clustering at the Country level. All models are estimated via three methods: ordinary least squares (OLS) model, robust regression model and instrumental variable model. In dropping outlier OLS model, top 5% samples on each dependent variable are dropped except % of Women Borrowers. Though we do not present the coefficients to conserve space, all models include all of the following controls; annual % of inflation rate (GDP deflator), annual % of GDP growth, Rule of law , Bank overhead costs / Total assets, Ease of doing business index, Bank Credit / GDP, regional dummies (Europe and Central Asia, Latin America and Asia, Sub-Saharan Africa, South Asia and East Asia and Pacific, omitting Middle East and North Africa), status dummies (commercial bank, credit union / coop, NGO, non-bank financial institution, omitting rural bank), lending methodology dummies (individual and solidarity lending, omitting village banking) and log of MFI's total asset values. The details of instrumental variable model are shown as below.

*1 1st excluded IV is Supervisory Forbearance Discretion, and 2nd is Independence of Supervisory Authority - Political respectively

- *2 1st excluded IV is Supervisory Forbearance Discretion, and 2nd is Percent of 10 Biggest Banks Rated by Domestic Credit Rating Agencies respectively

## <u>Panel A: Overall Score Nominal</u>

||Robust Reg w/o<br>Lending<br>methodology<br>dummy|OLS Dropping top<br>5% of dep var w/o<br>Lending<br>methodology<br>dummy|Robust Reg<br>Dep var:|OLS Dropping top<br>5% of dep var<br>Average loan size / per|OLS w/ the same<br>observations to IV<br>capita GNI|Instrumental<br>Variable 1*<sup>1</sup>|Instrumental<br>Variable 2*<sup>2</sup>|
|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|
|OVERALL SCORES (0-100)|-0.0001|0.0011|0.0009|0.0022|0.0122**|0.0384***|0.0375**|
||[0.920]|[0.598]|[0.151]|[0.291]|[0.023]|[0.002]|[0.019]|
|Inflation, GDP deflator (annual %)|0.0024|0.009|0.0011|0.0028|0.0376**|0.0566**|0.0446|
||[0.227]|[0.228]|[0.620]|[0.684]|[0.023]|[0.028]|[0.114]|
|GDP growth (annual %)|0.0058*|0.0155|0.0077**|0.0087|0.0414*|0.0488|0.039|
||[0.081]|[0.142]|[0.043]|[0.481]|[0.090]|[0.167]|[0.390]|
|Rule of law|-0.1335***|-0.2173***|-0.1470***|-0.2259***|-0.0528|0.0636|0.0842|
||[0.000]|[0.001]|[0.000]|[0.001]|[0.773]|[0.771]|[0.725]|
|BANK OVERHEAD COSTS /<br>TOTAL ASSETS|-1.1797***|-1.0808*|-0.4700*|-0.5368|0.5864|4.5297**|5.2612*|
||[0.000]|[0.073]|[0.061]|[0.430]|[0.710]|[0.017]|[0.054]|
|Ease of doing business index (1=most<br>business-friendly regulations)|0.0003|0.0022***|0.0004*|0.0023**|0.0063***|0.0089***|0.0084***|
||[0.133]|[0.009]|[0.087]|[0.013]|[0.004]|[0.000]|[0.000]|
|Bank Credit / GDP|0.1725***|0.2299*|0.2279***|0.3046**|0.3646|0.6382*|0.4696|
||[0.000]|[0.079]|[0.000]|[0.012]|[0.333]|[0.093]|[0.304]|
|Europe and Central Asia dummy|0.3190***|0.6106***|0.2823***|0.5173***|1.7165***|1.5769***|1.4400***|
||[0.000]|[0.000]|[0.000]|[0.000]|[0.000]|[0.000]|[0.000]|
|Latin America and Caribbean dummy|0.1347***|0.2031**|0.0633*|0.077|0.207|-0.3785|-0.4516|
||[0.000]|[0.015]|[0.077]|[0.335]|[0.399]|[0.308]|[0.230]|
|Sub-Saharan Africa dummy|0.2729***|0.3237***|0.3121***|0.2886***|0.4081|0.0381|-0.066|
||[0.000]|[0.001]|[0.000]|[0.004]|[0.145]|[0.903]|[0.823]|
|South Asia dummy|-0.0194|-0.0935**|-0.0127|-0.0459|-0.1931|-0.4365|-0.4193|
||[0.508]|[0.037]|[0.678]|[0.336]|[0.330]|[0.158]|[0.160]|
|East Asia and Pacific dummy|-0.0238|0.0028|-0.0467|-0.0436|-0.2306|-0.7126**|-0.7571**|
||[0.465]|[0.968]|[0.169]|[0.538]|[0.318]|[0.017]|[0.020]|

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