David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Ezio Di Nucci
Jack Alan Reynolds
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Journal of Applied Philosophy 29 (3):169-185 (2012)
Microcredit is often hailed as an effective way of alleviating poverty. In recent years, however, microfinance institutions have been the target of much criticism due to their comparatively high interest rates (which may be as high as 70–100% per annum). This paper discusses whether it can be morally justified to charge very high rates of interest when lending money to the poor. Arguments are drawn from contemporary as well as historical debates on usury, exploitation, egalitarianism and consequentialism. It is conceded that it would be preferable if interest rates could be reduced, but it is argued that typical microlenders today do nothing wrong in setting their rates at the current levels. Instead the responsibility rests on governments, commercial banks and overseas investors to facilitate an environment where rates could be reduced
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Citations of this work BETA
Tzu-Kuan Chiu (2013). Putting Responsible Finance to Work for Citi Microfinance. Journal of Business Ethics (2):1-16.
Marek Hudon & Joakim Sandberg (2013). The Ethical Crisis in Microfinance. Business Ethics Quarterly 23 (4):561-589.
Kevin T. Jackson (forthcoming). Economy of Mutuality: Merging Financial and Social Sustainability. Journal of Business Ethics.
Lauren Kleynjans & Marek Hudon (forthcoming). A Study of Codes of Ethics for Mexican Microfinance Institutions. Journal of Business Ethics.
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