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Economics

Microfinance Interest Rates and the Mission Drift Debate

Quick fact

Some microfinance institutions charge annual interest rates of 30% to over 70%, far above conventional bank loans, yet they are often the only credit source for the poor.

Why this is interesting

Microfinance promises to lift people out of poverty, yet some micro-loans carry interest rates higher than typical credit cards. How can this be, and does it still help?