The microlending industry is getting a lot of scrutiny in India and Bangladesh lately, where critics say the exorbitant interest rates cry out for tighter regulation. But in Haiti, microloans are a shining hope for people who would have otherwise lost their livelihoods in the January quake.
The New York Times took a look this week at how the bruised microloan industry in Haiti is expanding to meet demand as people attempt to rebuild. For people opening and operating small businesses in Haiti today, microcredit is the only show in town despite high interest rates of 30 to 55 percent. And the nonprofits and for-profit groups that provide microloans in Haiti are struggling right alongside their clients after many loans had to be written off when so many borrowers lost their lives or homes earlier this year.
The New York Times headline reads "Can Microlending Save Haiti?" The answer is, probably not by itself. But it's certainly a good tool to consider as governments, NGOs and the Haitian people work together to get lives and the economy back on track.