Fairness and microcredit interest rates: from Rawlsian principles of justice to the distribution of the bargaining range

Business Ethics 22 (3):277-291 (2013)

Abstract
This paper addresses the fairness of microcredit interest rates. Since microfinance institutions provide credit for the poor at relatively high prices, the fairness of their interest rates has been repeatedly debated. We first apply Rawls' principles of justice to the case of microcredit interest rates and suggest some limitations related to the hypothesis of rationality of the borrowers and the level of inequality. We then suggest another framework based on the analysis of the distribution of the benefits generated by the transaction to assess the fairness of interest rates. We conceptualize this as the distribution of the bargaining range between the borrowers' and the institutions' reservation price and discuss what these reservation prices could be in the context of microfinance
Keywords No keywords specified (fix it)
Categories (categorize this paper)
DOI 10.1111/beer.12026
Options
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

Our Archive


Upload a copy of this paper     Check publisher's policy     Papers currently archived: 38,878
Through your library

References found in this work BETA

The Idea of Justice.Amartya Sen - 2009 - Belknap Press of Harvard University Press.
Justice as Fairness: A Restatement.John Rawls - 2001 - Harvard University Press.
Morals by Agreement.David Gauthier - 1986 - Oxford University Press.
The Wealth of Nations.Adam Smith - 1993 - Hackett Publishing Company.

View all 17 references / Add more references

Citations of this work BETA

The Ethical Crisis in Microfinance.Marek Hudon & Joakim Sandberg - 2013 - Business Ethics Quarterly 23 (4):561-589.
The Just Price as the Price Obtainable in an Open Market.Juan M. Elegido - 2015 - Journal of Business Ethics 130 (3):557-572.

View all 6 citations / Add more citations

Similar books and articles

Mega-Interest on Microcredit: Are Lenders Exploiting the Poor?Joakim Sandberg - 2012 - Journal of Applied Philosophy 29 (3):169-185.
Fairness in Technological Design.Cameron Shelley - 2012 - Science and Engineering Ethics 18 (4):663-680.
The Limits of Rawlsian Justice.Roberto Alejandro - 1998 - Johns Hopkins University Press.
Conflicts of Interest? The Ethics of Usury.Martin Lewison - 1999 - Journal of Business Ethics 22 (4):327 - 339.
Usury.Joakim Sandberg - 2013 - In Hugh LaFollette (ed.), The International Encyclopedia of Ethics. Wiley-Blackwell.
Distributive Justice, Injustice and Beyond Justice.Wei Xiaopin - 2008 - Proceedings of the Xxii World Congress of Philosophy 50:857-872.
Well-Being and Fairness in the Distribution of Scarce Health Resources.Re'em Segev - 2005 - Journal of Medicine and Philosophy 30 (3):231 – 260.

Analytics

Added to PP index
2013-05-14

Total views
34 ( #212,280 of 2,318,363 )

Recent downloads (6 months)
3 ( #414,630 of 2,318,363 )

How can I increase my downloads?

Monthly downloads

My notes

Sign in to use this feature