The battle for the soul of microfinance

The trouble is transparency. Competition works best when customers know what they’re paying and what they’re paying for, which is why lenders in the US have been required for the past 40 years to disclose their interest rates in a standardised format. Few microfinance institutions do the same thing, and the results can be baffling. “You have a borrower comparing two institutions across the street from each other, and she can’t tell which has the cheaper product,” complains Chuck Waterfield, the founder of a non-profit called Microfinance Transparency. “You couldn’t. Nobody could.”

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