>Bank do refuse to lend to large segments of the population which can be lent to profitably. >In China, part of the reason is caps on loan interest rates. How

>Bank do refuse to lend to large segments of the population which can be lent to profitably. >In China, part of the reason is caps on loan interest rates. How exactly is that the reason? I thought about it, and guessed that you may mean that it is because lenders cannot charge high interest rates to those segments, but if they are a risk anyway (guessing because poor or have unpredictable income), why would banks want to lend to them? I mean, even if banks were allowed to charge higher interest, the borrowers could default on the principal or the interest, right? [Not a financial expert here.]