This Brief is a summary of: Rosenberg, Richard, Gonzalez, Adrian and Narain, Sushma, The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates? (Feb 2009). CGAP Ocassional Paper No. 15. Available at SSRN: http://ssrn.com/abstract=1400291

This paper explores whether microcredit borrowers are charged unreasonably high interest rates. It draws on data from Microfinance Information Exchange and the MicroBanking Bulletin. The paper does not find evidence suggesting any widespread pattern of borrower exploitation by MFIs charging high...

Over the past two decades, institutions that make micro loans to low-income borrowers in developing and transition economies have focused increasingly on making their operations financially sustainable by charging interest rates that are high enough to cover all their costs. They argue that...

Global differences in microcredit interest rates are dramatic. The global average is about 35 percent, but the average in Uzbekistan is above 80 percent, and in Sri Lanka it is around 17 percent. Small loan sizes are the most commonly cited reason why microcredit rates are higher than normal...

From the beginning of modern microcredit, its most controversial dimension has been the interest rates charged by micro lenders, often referred to as microfinance institutions (MFIs). These rates are higher, often much higher, than normal bank rates, mainly because it inevitably costs more to...

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...