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Also - many of the borrowers find positive NPV results despite the high interest rates. This is because there is such a dearth of credit, that many activities
by mathattack 13y ago
Also - many of the borrowers find positive NPV results despite the high interest rates. This is because there is such a dearth of credit, that many activities that would be profitable elsewhere are just not being done.
If you make it illegal, it creates a worse problem because then people's legs get broken when they miss payments.
- netcan 13y agoI doubt it. NPV is a kind of weird thing to be measuring though in personal lending. I guess in some cases it could be a "repair your car so you can get to work" situation. More likely it's to pay rent or eat or buy weed.
- mathattack 13y agoIn Asia a lot of the microfinance goes to fund new businesses. The rates are similar to what's been discussed here - once all the fees are factored in it can be 30some percent. It doesn't sound like charity, but there are a lot of fixed costs involved in the loans that need to be amortized.