High interest rates hurt financial inclusion

Editor, Refer to the story, "Borrowers can bargain for cheaper loans-BNR" (The New Times, October 5). This is an exciting position by BNR. Borrowers, especially peasants, have to be defended on the interest rates offered to them. In fact, this goes beyond a watchful eye of BNR to mass education on how to relate with banks.

Editor,

Refer to the story, “Borrowers can bargain for cheaper loans–BNR” (The New Times, October 5). This is an exciting position by BNR. Borrowers, especially peasants, have to be defended on the interest rates offered to them. In fact, this goes beyond a watchful eye of BNR to mass education on how to relate with banks.

We need customers who can easily say no where cost/benefit analysis is not favourable. I do not subscribe to the idea of scapegoating foreign borrowed money; it is a simplified argument.

Exaggerated interest rates to civil servants and peasants undermine our global goals of “financial inclusion” hence increasing vulnerability of households. I do consider disequilibrium between high interest rates to loan vis-à-vis low repo rates mentioned by BNR as a missing link in business ethics. The regulator needs to bring the “red pen” so as we know who is who in the banking world.

Justus

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