Mega‐interest on Microcredit: Are Lenders Exploiting the Poor?

Journal of Applied Philosophy 29 (3):169-185 (2012)
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abstract 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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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. Hoboken, NJ: Blackwell.


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Joakim Sandberg
University of Gothenburg

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