Microcredit interest rates in Mexico often around 150% annually

We definitely need to talk about interest rates and what fair pricing really means when it comes to protecting clients. I think we can all agree 150 percent can’t be considered fair, even if it’s within the market average and needed to cover microfinance institutions’ costs (fair pricing, as defined by the Client Protection Standards).

Mexico probably has the highest microcredit interest rates worldwide. But other countries like Guatemala, Peru, Nicaragua, and some in West and East Africa and Asia also regularly see average annual rates above 50 percent (but we don’t have much data from Africa and Asia).

The numbers presented below only represent a small part of Mexico’s overall finance sector, but they come from ProDesarrollo, a Mexican industry network that represents institutions committed to social impact. And they affect millions of microcredit clients.