Microfinance Lenders in Sierra Leone Accused of ‘Payday Loan’ Interest Rates
By Mara Kardas-Nelson
The world’s largest NGO has been forced to conduct an internal review of a money-lending scheme it runs for the poor in Sierra Leone after some borrowers amassed significant debts and were reported to police when they couldn’t repay loans.
A Guardian investigation into a microfinance programme run by Brac found that the NGO’s staff were failing to fully explain the conditions of the loan to borrowers, or ensure they could afford the high interest rates associated with such loans.
Brac, an NGO that provides financial services for people living in poverty, has 5.6 million borrowers globally, almost 90% of whom are women.
As of May 2019, Brac Sierra Leone had a $5m (£3.9m) portfolio and 46,500 borrowers.
Photo courtesy of bobthemagicdragon.