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View Diary: Microcredit: be a Venture Capitalist. (185 comments)

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    I participated in one microloan program that leant in Nicaragua. I made like 4% interest (at a time when interest rates were much higher than now, so it was a low rate, but still something) and the company was charging something like 8%, if I remember. The person taking the loan was thus paying far less than was norman within Nicaragua (20% or so) but both the company and the person putting up the money made some. They had a nearly 100% payback and always on time. They also kept track of the businesses they had helped and they businesses really did do well from the loans.

    Your concern is valid, but I think these things work well almost all the time. I have never heard a microloan horror story, but they may well be out there.

    By the way, most often the person taking the loan is a she and so it also helps give women more economic freedom.

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