Opportunity International is comprised of more than 40 different affiliates in the developing world, each of which operates within a different economic, social, political and regulatory environment. Interest rates and repayment structures for our microloans therefore vary and are set by each local Opportunity affiliate - not by Supporting Members such as Opportunity International Canada.

There are two main reasons why charging interest on our microloans is necessary. First, in many developing countries, high inflation rates require a level of interest on all loans to match pre-existing economic conditions. For example, though inflation in Canada is around 2%, inflation in Mozambique can jump to 10-15%.

Second, charging interest on loans allows our affiliate partners to cover their own costs so they can sustain operations, ensuring that the loan capital is maintained to benefit the community for generations. Our interest rates help cover the administrative costs of the small loans and business training, which for Opportunity typically includes six weeks of business training before a client receives their first loan, and several more training sessions during the loan cycle.

In every case, Opportunity International's interest rates stand at only a small fraction of the 300% to 3,000% interest typically charged by moneylenders, who are often the only alternative for those living in chronic poverty.

Much of the recent focus on microfinance interest rates concerns for-profit microfinance organizations (e.g., SKS, Compartamos) which, in some cases, have charged predatory interest rates to maximize profits. By contrast, Opportunity International is motivated by charitable objectives. We do not exist to make a return on investment for shareholders; our return is non-financial – seeing families set free from poverty.

Watch microfinance expert AT Tshibaka address the interest rate question