An indirect component of the cost of credit in microfinance, which determines that the expected profitability of the owners of the microfinance institutions is high; and therefore, demand a higher interest rate for the loans granted to microentrepreneurs, is the ignorance of the willingness to pay of potential debtors.
In the case of debtors with established businesses and recent credit history, there is no problem. The problem arises when it comes to small, mostly informal businesses with no credit history. There it is not enough to determine the payment capacity of the potential debtor. It is also necessary to know the willingness to pay. But: How to determine it, if there is no credit history?
Definitely, the only way to know is after the loan is granted, which implies a much greater risk than if it were a client with a known history.
Hence, the Microfinance Institution that decides to grant the loan, assuming a higher risk than normal, demands a higher return (the higher the risk, the higher the return), translated into a higher active interest rate.
This does not imply that the Microfinance Institutions do nothing to mitigate the ignorance of the willingness to pay of the potential debtor.
They usually resort to indirect sources of validation, which are mainly references from the environment, suppliers, customers, etc.
In addition to the Risk Centers specialized in credits to microenterprises, which report telephone debts, services (electricity), with the municipalities (SAT), etc.
In the case of the references of the environment, the usual thing is to collect the opinion of the neighbors, the grocer on the corner, the watchman, the lady who waters the garden every morning, etc. In general, of anyone who can help to know the moral profile of the potential debtor.
However, to the extent that the microentrepreneur is generating a favorable credit history and the Microfinance Institution is becoming aware of the debtor's willingness to pay, it is normal for them to gradually reduce the interest rate in subsequent operations. In case of not doing so, there is no reason to worry, for that is the competition, flat to grant preferential rates to the punctual clients of their peers, as well as to implement debt subrogation campaigns.
In conclusion, microentrepreneurs without a credit history can also access credit, although initially at rates above the average. The important thing is that as they generate a favorable record, their situation improves and it is normal for them to mobilize in the Financial System, perhaps initially from an NGO to an Edpyme, then to a Financial, then to a Savings Bank or a CRAC and finally to a bank, with the benefits that they imply.
