Wednesday, November 19, 2008
Why a flat rate interest rate structure
In class we discussed why you might charge a flat interest rate on a microfinance loan. Beyond its simplicity and the fact that this may the pricing that is already used in the informal market, it may also be a way of earning the most income while complying with government usury laws that cap interest rates. Thanks to Tanmay for pointing this out to me after class.
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