The new moneylenders: Are the poor being exploited by high microcredit interest rates?

Abstract

Over the past two decades, institutions that make microloans to low-income borrowers in developing and transition economies have focused increasingly on making their lending operations financially sustainable by charging interest rates that are high enough to cover all their costs. They argue that doing so will best ensure the permanence and expansion of the services they provide. Sustainable (i.e., profitable) microfinance providers can continue to serve their clients without needing ongoing infusions of subsidies and can fund exponential growth of services for new clients by tapping commercial sources, including deposits from the public.

Citation

Rosenberg, R., Gonzalez, A. and Narain, S. (2009), "The new moneylenders: Are the poor being exploited by high microcredit interest rates?", Watkins, T.A. and Hicks, K. (Ed.) Moving Beyond Storytelling: Emerging Research in Microfinance (Contemporary Studies in Economic and Financial Analysis, Vol. 92), Emerald Group Publishing Limited, Leeds, pp. 145-181. https://doi.org/10.1108/S1569-3759(2009)0000092008