Why are microfinance interest rates so high?

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Date

May 28, 2010

May 28, 2010

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> Posted by Kelley Mesa
Center Director Elisabeth Rhyne’s latest Huffington Post blog delves into microfinance interest rates and what should be expected…

Americans often suffer sticker shock when they hear about interest rates charged in international microfinance. At annualized rates above 20 percent, most Americans start getting uncomfortable, and when they hear that in some places annual rates rise as high as 100 percent or even more, their moral outrage beepers start to malfunction. This is unfortunate, because when we are in a state of high outrage, it’s hard to listen.
When asking “how much is too much?” it is important to reserve judgment long enough to examine the conditions that determine international microfinance interest rates. Here are three factors that international microfinance providers have to consider as they face the hard task of determining what constitutes responsible pricing.
Read the article…

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