How might such high interest rates be reduced

Reference no: EM131917463

Problem

1. Explain why NGOs charge borrowers higher interest rates, on average, relative to commercial microfinance banks. Under what conditions would it be a bad thing? How might such high interest rates be reduced-and with what costs and benefits?

2. Consider some of the interest rate issues emphasized in this chapter. What are some potential reasons why it is difficult for a microfinance institution to simply increase its interest rates in order to reach financial sustainability? Can you think of any creative solutions to this prevalent challenge?

Reference no: EM131917463

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