Becomes Quote by M. S. Swaminathan
“A number of non-banking finance companies have entered the rural microcredit market. Many microcredit agencies have been charging interest rates not very dissimilar to those charged by moneylenders. Borrowing then becomes more to meet pressing consumption needs, rather than for farming or small-scale enterprises.”
About This Quote
Source Report: Rural Microcredit Market Analysis, 2018
Microcredit firms often charge interest rates similar to moneylenders, leading borrowers to use loans for consumption rather than productive activities.
In simple terms: Microcredit rates similar to moneylenders, causing consumption borrowing.
Key Takeaway
Regulate rates to promote productive lending.
Themes
finance
microcredit
interest rates
consumption vs investment
rural economies
Mood
concerned
critical
Type
policy
economic
When to use this quote
- rural households
- small businesses
- policy makers
- NGOs
Key Concepts
economic development
usury
financial inclusion
Questions to Reflect On
- What policies can ensure credit supports productive use?
- How to balance access with affordability?
A Different Perspective
High rates can trap borrowers in debt cycles, limiting economic growth.
