Are Kiva's Interest Rates Too High?

The Father of microfinance, Muhammed Yunus, has a bone to pick with kiva.org, one of the biggest players in the microfinance industry.    In Yunus’ new book “Creating a World Without Poverty”  he argues that microfinance institutions should be penalized if they charge more than 15% above their long term operating costs.

To counter, Kiva says that these rates are fair because they are much better rates than the traditional local alternatives.    Kiva also points out that the costs of making a loan in a developing country are greater than in the West.