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by triaboat
5648 days ago
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Interest rate is basically the price of money. In a developing economy like India, growing at 8-10% the demand for money is greater as a result, it's price is also greater. If you make a term/fixed deposit in India for a year it attracts an interest rate of 8-9%. Education, Car and Home Loans for credit-worthy individuals from established banks range from 12-18%. Personal Loans, not backed by a security range from 20-24%. So a micro-finance institution lending at 24% p.a to 'non-professionals' in rural areas with no known credit history is not bad at all considering the risk that they take up and the cost of funds that they incur(as pointed out by someone else) |
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