Nicaragua's micro-credit firms so "no" to lower rates
The executive director of the Association of Micro-Finance Institutions (Asomif) says it's impossible to lower interest rates to 8 percent and lengthen repayment times for small loans.
Thursday, July 24, 2008
Alfredo Alaniz was replying to a proposal from a group of debtors in the Jalapa region after a riot that resulted in injuries and property damage from frustrated borrowers who failed to get more generous terms for their loans.
Micro-finance has grown rapidly in Nicaragua over the last decade. Between the end of 1999 and the end of last year, the total micro-credit portfolio grew at an average 19.4 percent a year, while the number of clients grew by 25 percent a year, according to industry statistics.
Asomif will submit a plea for unconstitutionality at the Supreme Court of Justice.
In Nicaragua, the ‘No Pago’ (Non Payment) movement has generated such distrust in international sources of finance that this year credit lines -which were $80 million-, have barely reached $5 million.
In Nicaragua two microfinancers will provide short-term loans for progressive housing construction.
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