Microfinance Companies reaping heavily from small businesses

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• Ken Ntiamoa 12 years ago

  High interest rates will eventually kill entrepreneurship. It is also inflationary. One might argue that inflation is the reason for high interest rates - that is- the banks charge high interest rates so they can keep up with ...
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  High interest rates will eventually kill entrepreneurship. It is also inflationary. One might argue that inflation is the reason for high interest rates - that is- the banks charge high interest rates so they can keep up with inflation. The banks' high interest rates then cause further inflation and the cycle continues unabated. If a small farmer borrows at high interest rate, he must charge higher and higher prices to be able to pay back his loan and keep a profit. Unfortunately, inflation erodes his purchasing power so much so that it becomes meaningless to save. If Inflation is a cancer then high interest rate is a tumor. First,remove the tumor then radiate the cancer cells.
  
  Ken

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• well said 12 years ago

  great

  great

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• Patrick Awuku Dogbe 12 years ago

  Please there are a lot of mistakes in this write-up! Please check your script carefully before you publish next time. But the topic is really important and we all need to know why Micro-finance institutions are charging such ...
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  Please there are a lot of mistakes in this write-up! Please check your script carefully before you publish next time. But the topic is really important and we all need to know why Micro-finance institutions are charging such high interest rates!

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• Simple Man 12 years ago

  Is this forum the place for English 101??? Oh give us a break!! Didn't you understand or comprehend what was written??

  Is this forum the place for English 101??? Oh give us a break!! Didn't you understand or comprehend what was written??

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• Okyere 12 years ago

  Patrick you are right the English is bad the gist is missing and the writer seems not to have much knowledge in Banking and Finance

  Patrick you are right the English is bad the gist is missing and the writer seems not to have much knowledge in Banking and Finance

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• kay 12 years ago

  The micro finance companies give loans to most clients with high risk that the banks will not or cannot as per their regulations give loans. The rate of delinquency is high and then cost of colection is alsohigh. Even marketi ...
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  The micro finance companies give loans to most clients with high risk that the banks will not or cannot as per their regulations give loans. The rate of delinquency is high and then cost of colection is alsohigh. Even marketing and promotion is very costlynthan inn the banks. Whies the banks can just advertise on air with only service charges, the Micro finance Companies in addition to media advertisement employ some time field officers on commission or full time basis to do a door to door marketing. This comes with a high cost and risk. Whiles clients of banks walk to the premises for srvices inth e microfinance compoany most services are entrusted in the hands of field officers who have the potential of absconding with huge sums of money causing heave loses to the company. The high interest rate or straight line method is also to avoid the indirect compounding of interest as in reducing balance whereby in the event of a missed payment the interest still increases. I agree that the terms are somehow harsher but lets ask ourselves why the banks dont go down to the SMEs. The answer is the high risk.

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• Truth and Faith 12 years ago

  Your article is not bad but you have to understand that, the banking institutions are not there for the micro borrowers that is why the micro finance institution is there to help them. You should also know that, most of this ...
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  Your article is not bad but you have to understand that, the banking institutions are not there for the micro borrowers that is why the micro finance institution is there to help them. You should also know that, most of this clients who take this micro loans do not even pay and since some of these loans are collateral free, it affects microfinance institutions which some even write the unpaid loans off as bad debt. therefore operating in that industry poses higher risk thats is why the interest rata is high. However we plead with those in that industry to reduce the rate a bit for all to be able to borrow from them

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• closed-minded inward fools call me ak 12 years ago

  If you have a bad credit history you pay through the roof any place on Earth! Respect yourself and you will be respected!
  ====================================
  I am the man with the blueprint to do this:
  
  Afr Amer male nee ...
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  If you have a bad credit history you pay through the roof any place on Earth! Respect yourself and you will be respected!
  ====================================
  I am the man with the blueprint to do this:
  
  Afr Amer male needs 5,000 US adults now to help me Eradicate Poverty in the US (in less than 10 years easily)!
  By the way, I do not need anyone's money, donations, fundraisers or crowdfunding help either. All i need is two things: 1) The internet 2)Networking online across the US.

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• solomon 12 years ago

  lt ok to me our source of dose,nt come from any body we look for our investors

  lt ok to me our source of dose,nt come from any body we look for our investors

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• Tomorrow 12 years ago

  Rev. Dr. What? Emmanuel Ameevor? Christ me.
  Did i hear Gentrac. Is it the same man who has swindled thousands of people and is in hiding?

  Rev. Dr. What? Emmanuel Ameevor? Christ me.
  Did i hear Gentrac. Is it the same man who has swindled thousands of people and is in hiding?

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• Yaw 12 years ago

  This Emmanuel Ameevor man who is the Managing Director of Gentrac Investments Limited and claims to be a Reverend Minister is nothing but a THIEF. He had swindled thousands of people millions of Ghana Cedis and he is here tal ...
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  This Emmanuel Ameevor man who is the Managing Director of Gentrac Investments Limited and claims to be a Reverend Minister is nothing but a THIEF. He had swindled thousands of people millions of Ghana Cedis and he is here talking interest rates. By the way Where is he?

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