How Rogue Microfinance Lenders Overburden Poor South Africans

Tuesday, November 18, 2014

Microfinance, or lending small sums to low-income borrowers or entrepreneurs, was supposed to be a source of development and income growth for the poor in Africa. Has it worked?

South African consumers, for example, tend to be highly indebted, and their debt levels are still rising. Fully 31 perent of the value of new credit lines in the country go to those with under $900 in income per month — and 60 percent of credit-active consumers are at least 1-2 months in arrears.

In other words, it’s increasingly looking like those who can least afford it are the most overextended. How did this happen?

Source: AFKInsider (link opens in a new window)

Categories
Entrepreneurship, Impact Assessment
Tags
impact investing, microfinance, social development, social entrepreneurship