Many Borrowers of Microloans Now Find the Price is Too High

Drawn by the prospect of hefty profits from even the smallest of loans, a raft of banks and financial institutions now dominate the field, with some charging interest rates of 100 percent or more.

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Many Borrowers of Microloans Now Find the Price is Too High

“We created microcredit to fight the loan sharks; we didn’t create microcredit to encourage new loan sharks,” Mr. Yunus recently said at a gathering of financial officials at the United Nations. “Microcredit should be seen as an opportunity to help people get out of poverty in a business way, but not as an opportunity to make money out of poor people.”

“You can make money from the poorest people in the world — is that a bad thing, or is that just a business?” asked Mr. Waterfield of MFTransparency. “At what point do we say we have gone too far?”