Small traders shun loans from microfinance institutions

Expensive microfinance loans in Kenya are driving smallscale businesspeople away from the same institutions that are supposed to boost businesses and help in eradication of poverty.

Most businesspersons are shunning loans from the institutions due to high interest rates and strict repayment conditions, which make the loans hard to service. Most micro-finance institutions in Kenya charge interest rates that range from between 1.8 per cent to 2.5 per cent per month. Others, on the other hand, charge at least 0.5 per cent per week.