This Brief is a summary of: Rosenberg, Richard, Gonzalez, Adrian and Narain, Sushma, The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates? (Feb 2009). CGAP Ocassional Paper No. 15. Available at SSRN: http://ssrn.com/abstract=1400291

Over the past two decades, institutions that make micro loans to low-income borrowers in developing and transition economies have focused increasingly on making their operations financially sustainable by charging interest rates that are high enough to cover all their costs. They argue that...

This brief addresses demand for micro credit only, not demand for microfinance or other microfinance services, such as savings or funds transfers, which may be greater than the demand for micro credit. For instance, the ratio of savers to borrowers is about 10-to-1 for Bank Rakyat Indonesia,...