Growth in Microfinance Field Spurs Debate: Microfinance Council Guest Post
Recently, ACCION USA’s Microfinance Council authored a guest post on the Woodstock Institute Blog. In it, the microfinance volunteer and advocacy group explored the ongoing debate between interest rates and sustainability:
“The popular debate about microfinance ignores the most important ideological challenge confronting the industry: how to balance the tradeoff between interest rates and sustainability. The cost of providing microfinance products is extremely high. Large banks benefit from scale and from borrowers’ strong credit histories and collateral in case of default; a MFI generally has none of these advantages, making it more difficult and costly to determine whether the loan will be repaid.”
Read the full Woodstock institute guest post.