In order for an MFI to be profitable the interest rate charged for poorer borrowers tends to be ________,so most of the loans are going to the _______ of potential borrowers.

Question

Quizplus · Accepted Answer

In order to be profitable, an MFI tends to charge higher interest rates for poorer borrowers, which means that most of the loans will end up going to the wealthiest of potential borrowers. This is because poorer borrowers are seen as riskier, and charging higher interest rates helps to compensate for that risk. Additionally, wealthier borrowers are often more able to afford the higher interest rates, so they are more likely to take out loans.

In Order for an MFI to Be Profitable the Interest