MFIs hike rates on poorest borrowers as funding costs climb despite govt guarantee scheme

Published on 24 April 2026

A credit guarantee exists, yet MFIs pay more

Microfinance lending rates for the poorest borrowers are rising even though a government credit guarantee scheme was meant to reduce costs. MFIs say their own borrowing is getting more expensive, particularly the higher prices they pay banks for funds. As a result, the increased financing burden is getting passed on to end borrowers.

MFIs are raising rates for the poorest borrowers
Government credit guarantee is not lowering lending costs
Higher borrowing expenses from banks are cited as the cause
End borrowers may face costlier repayments

#borrowing costs #lending rates #government guarantee #microfinance

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MFIs hike rates on poorest borrowers as funding costs climb despite govt guarantee scheme

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