Exorbitant interest rates under ‘microfinance’ name:
2 years ago
Small private and public actors charging interest rates up to 200% the main problem
- Collateral free - not physical but there are alternatives. Borrowers themselves are guarantors for others
- Small-sized loans (Rs. 25, 000 to Rs. 750, 000 under the act)
- Door to door service. This reduces the cost to the customers, who may otherwise not be able to go to centralised places of money lending.