Andhra Pradesh Microfinance Situation In Perspective
1. Microfinance Interest rates: This is perhaps the most contentious issue in this whole debate. It has been reported in the media that MFIs charge between 26-60% p.a. effective rates. The truth is MFIs do charge higher rates than banks and very few, if any, charge more than 36%, all-inclusive. Someone who is doing it at more than 40% is probably not the MFIs as we know them. It would be good to check the credentials of these entities just to be sure if they really qualify to be a part of the industry or just wearing MFI hats to get away with their exploitative businesses....