By Corinna Barnard
Saturday, May 14, 2011
Bad news came this week for shareholders of India's largest microlender. That offers a chance to tout two writers who always said high interest rates--of 20 percent and higher--were never the best news for the world's poorest female borrowers.
(WOMENSENEWS)--News this week that India's largest microlender, SKS Microfinance, reported heavy losses brought two names zinging to mind: Barbara Crossette and Susan Feiner.
Both are part of Women's eNews' loose-knit editorial team. Both took issue with the generally bullish outlook on microfinance as a means of ending--or even curbing--female poverty that prevailed for many years.
Around now both writers, in the wake of all the troubles surrounding microfinance, could and should be saying "I told you so." Since they're not, I'd like to do that for them.
Crossette is an author with extensive experience covering the United Nations, including a long career for The New York Times. She has written for Women's eNews and serves us with occasional editorial guidance. Eight or so years ago she gave us a tip about covering microfinance or microcredit that became our ironclad rule: "Ask about the interest rates."
That information was not at the top of microfinanciers' press kits. When Women's eNews' reporters asked the question the answer they got was startling: a common range of between 20 percent and 50 percent. Wow.
When I told people about those rates their eyes often widened in horror. They'd picked up on the "women's empowerment" virtues of microfinance and had a hard time believing it was true. Why so much higher than the 6 percent or 8 percent paid by middle-class U.S. borrowers?
The story line--which you can see running through our coverage, some of which is in the related stories provided below--was that even though micro-borrowers' collective repayment rate was a stellar 98 percent, they were a high credit risk because they had no wealth whatsoever to seize in the event of a default.
By Rebecca Harshbarger
By Susan Feiner and Drucilla Barker
By Emily Bowers
By Sheryl Nance-Nash
By Gagandeep Kaur
By Barbara Crossette
By Joanne Omang