Never again after the Andhra Pradesh disaster, you might think, would poor borrowers be allowed to take on too much debt. Sri Lankan microfinance loans in 2020 were worth $3.2bn, or more than 50 times the 2006 level. What’s clear is that the industry, like any kind of money lender, usually wants to obscure or hide its interest rates. In Cameroon and Zambia, microcredit interest rates exceeded 100% before regulators imposed interest-rate ceilings in 2013. With Africa’s population growing, urbanisation accelerating and digital lending channels becoming more common, microfinance lenders aim to expand.

Source: The North Africa Journal January 03, 2024 19:20 UTC