Five - Six Lending
Tuesday, June 3rd, 2008
I was sent this email by partner Teilo and wanted to share it:
In one country, as part of a ubiquitous custom called “five–six” lending, poor people borrow five pesos from informal lenders and repay six, usually within a week. The annual interest rate works out at roughly 13,000 percent.
This is hardly the only place where low-income people suffer from a lack of choices and information. Their options have been limited because legitimate companies have been reluctant to enter the markets that serve them.