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In addition, banks and other lenders maintain a spread between the rate they pay on deposits and the rate they charge on loans. This is, of course, how they make their money. But in poor countries, this spread widens to alarming proportions.

misallocation 不適正な配分

This gulf between loan rates and deposit rates contributes to the misallocation of capital, the WDR points out.

For the poor, an investment is worthwhile only if its returns exceed the cost of capital, ie, the rate they must pay on money borrowed from the bank. For richer entrepreneurs who can finance themselves, on the other hand, an investment is worth doing if it exceeds the opportunity cost of capital, ie, the rate they can earn by putting their money in the bank. In a perfect credit market, the spread between these two rates, the deposit and the loan rate, would be wafer thin. But in poor countries, it is often unbelievably fat.