In their defence, APR is problematic. It's misleading in itself. APR is enforced to keep lenders from disguising the real costs of a loan using fees and such.

In their defence, APR is problematic. It's misleading in itself. APR is enforced to keep lenders from disguising the real costs of a loan using fees and such. It's an ethical advertising standard. But, disguising the real costs of a loan is not the only reason to use fees. Fees are also used because the lenders' costs are not just borrowing costs. There's a flat cost to processing a loan. That translates to a flat fee which can raise APR to seemingly horrendous rates. Basically, loans don't scale linearly. Maybe micro-finance should come up with it's own standard practice. People need to make some allowances though. 25% is not terrible in every context.