Microfinance groups agree to publish interest rates

Eleven microfinance groups that together serve nearly 26 million people agreed at the Microfinance Summit Campaign conference in Bali, in July, to publicly report their annual interest rates, a move many hope will empower the world’s poorest borrowers as the once-charitable sector becomes increasingly commercialized. The rush of new entrants into the microcredit market has created a welter of offerings, but lack of standardized reporting makes it hard for borrowers to work out how to get the best deal. Charles Waterfield, founder of MicroFinance Transparency, which plans to publish the data, says the organization will publish standardized annual interest rates on the internet. The data from lending institutions will be self-reported. The initiative is confirming its funding and plans to start publishing country-specific data on its website this month. The push for disclosure comes at a time of debate within the field, pitting those who believe that profitability is the key to sustainability against those who fear the movement is losing its ethos, preferring to think in terms of investors rather than people in need.

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