Response to NYTimes article of 28Aug09
The New York Times ran an article on 28Aug09:
In response MFTransparency submitted the following letter to the editor:
Response to the New York Times
Mixing the profit motive and poverty efforts can be highly combustible, but also very powerful. Should rich people earn profits providing services to the poor? Sure, as long as both gain from the exchange. But how do we preserve an equitable balance in this unequal transaction? In microfinance one way to keep lenders honest is to make the rates charged transparent to all involved. Markets work better when consumers have transparent prices to make informed decisions.
At MicroFinance Transparency we collect and post accurate, comparable prices charged on microfinance loans. Rates are not always extreme. In Bangladesh we found that over 80% of microfinance clients are paying APRs less than half of the rate given in your article.
Pricing transparency and other client protection efforts will help harness the power of the marketplace to work for the poor and help keep microfinance focused on its original goal.
Chuck Waterfield, Founder and CEO
Larry Reed, President