Microfinance Loans

Microfinance programs have created new opportunities in contexts as diverse as villages along the Amazon, inner-city
Los Angeles, and war ravaged Bosnia. Programs are well-established in Bolivia, Bangladesh,and Indonesia, and momentum is gaining in Mexico, China, and India.

The microfinance movement is thus populated by diverse institutions, some large and many small, some urban and some rural, some more focused on social change and others more focused on financial development. If the programs that are focusing on social change are cost-effectively achieving their goals, should we be concerned that part of their operation is subsidized? Should we be concerned that, to achieve financial success, Compartamos has had to charge very high
interest rates.

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