Loans Micro financing must be regulated for protection of the borrowers

[Alexandoy]

The micro financing in our country is unabated. The usurious lenders are having a heyday with the borrowers from the poor sector. Such lenders do not require a collateral for small loans ($20 to $200). That makes it very attractive to borrowers. With the 20% monthly interest it is a given that borrowers will always be borrowing.

The government should have an agency to regulate micro financing. Maybe the registered or licensed micro financier can levy an interest of 5% per month which will alleviate the situation of the small borrowers. A certified lender will also have the backing of the government in case of non-payment by the borrower. Most of the usurious lenders here are foreigners so you can imagine the profit that they are raking from the borrowers.

 

[Augusta]

This seems like a symbiosis kind of situation where both the borrower and the lender needs to be protected by the government. Borrowing money is never a problem but paying it back especially with it high interest. People needs to borrow what they can easily pay back it will help everyone