I read about this in the Guardian and have now joined. It gave me a warm feeling and I think it's a great idea so thought some of you might be interested.
http://www.lendwithcare.org/ (http://www.lendwithcare.org/)
There's a link to the Guardian article on the home page.
There have been a number of reports of problems with Microfinance schemes. The people are put under enormous pressure to repay the debts. It is not clear from this pay how much interest they have to pay and who receives this interest.
Info on interest rates here: http://www.lendwithcare.org/info/mfis_interest_rates
I doubt very much whether the Co-op would associate itself with loan sharks. This looks like a very worthwhile initiative.
Sorry for me this is too vague. The people and the amounts of money are identified why not the extra arrangement fee. Since the money is loaned interest free there should be no interest payable.
Charging interest/fees of 30% is huge. It takes less than three years for the amount to double. It makes it very difficult for people to get sufficient return to service the loan, then extra to repay the loan and on top make sufficient extra for themselves to justify the scheme in the first place. In the end the only way is for people to take out another loan to repay the first one.
If anyone has any money making schemes which raise this kind of return they will be doing very well indeed. I just do not see it as the stuff that poor people in poor villages are made of. In my estimation they will need entrepreneurial skills which make Alan Sugar look like an amateur to succeed.