Microlending Backlash Spreads to Bangladesh
Backlash against the booming microfinance industry that has thrown Andhra Pradesh into crisis may be spreading to the Mecca of Microlending: Bangladesh.
The south Asian nation’s Microcredit Regulatory Authority is planning to slap new restrictions on the industry which gives tiny loans to mini entrepreneurs. Read more on Wall Street Journal
Bangladesh caps microfinance rates at 27%
Bangladesh, the birthplace of the global microcredit movement, has decided to cap interest rates for microloans at 27 per cent, the latest sign of a growing regulatory backlash in south Asia against an industry once hailed as a “magic bullet” to cure poverty.
The move came just days after India’s microfinance industry agreed to a voluntary 24 per cent interest rate cap on its microloans in the southern state of Andhra Pradesh, where local authorities have accused the industry of charging usurious rates and employing coercive collection tactics. Read more on Financial Times – Requires REGISTRATION !