This paper addresses the fairness of microcredit interest rates. Since microfinance institutions provide credit for the poor at relatively high prices, the fairness of their interest rates has been repeatedly debated. We first apply Rawls' principles of justice to the case of microcredit interest rates and suggest some limitations related to the hypothesis of rationality of the borrowers and the level of inequality. We then suggest another framework based on the analysis of the distribution of the benefits generated by the (...) transaction to assess the fairness of interest rates. We conceptualize this as the distribution of the bargaining range between the borrowers' and the institutions' reservation price and discuss what these reservation prices could be in the context of microfinance. (shrink)

This paper addresses the fairness of microcredit interest rates. Since microfinance institutions provide credit for the poor at relatively high prices, the fairness of their interest rates has been repeatedly debated. We first apply Rawls' principles of justice to the case of microcredit interest rates and suggest some limitations related to the hypothesis of rationality of the borrowers and the level of inequality. We then suggest another framework based on the analysis of the distribution of the benefits generated by the (...) transaction to assess the fairness of interest rates. We conceptualize this as the distribution of the bargaining range between the borrowers' and the institutions' reservation price and discuss what these reservation prices could be in the context of microfinance. (shrink)

Slow money, or patient nurturing capital directly invested locally in small firms in food and basic industries, is a new term but an old notion. It gains revival in times of crisis, especially after the recent financial crisis, as people search for meaning and a way out of the ruinous effects of uncontrolled capitalism. This article traces the roots of the movement to Gandhian thought. It examines the cases of the CIGALES clubs of microangels in France and the more recent (...) case of the slow money alliance to ferret out the basic principles and strategies of these movements and how they are aligned with Gandhian values. (shrink)