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

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

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.

Links

PhilArchive



    Upload a copy of this work     Papers currently archived: 94,439

External links

Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Similar books and articles

Mega‐interest on Microcredit: Are Lenders Exploiting the Poor?Joakim Sandberg - 2012 - Journal of Applied Philosophy 29 (3):169-185.

Analytics

Added to PP
2016-02-04

Downloads
39 (#404,589)

6 months
12 (#312,707)

Historical graph of downloads
How can I increase my downloads?

References found in this work

Anarchy, State, and Utopia.Robert Nozick - 1974 - New York: Basic Books.
A Theory of Justice.John Rawls - 1971 - Oxford,: Harvard University Press. Edited by Steven M. Cahn.
Justice as fairness: a restatement.John Rawls (ed.) - 2001 - Cambridge, Mass.: Harvard University Press.
The idea of justice.Amartya Sen - 2009 - Cambridge, Mass.: Belknap Press of Harvard University Press.

View all 20 references / Add more references