Problem

High interest rates

Other Names:
Exorbitant interest rates
Structural usury
Prohibitive cost of money
Exorbitant debt interest
Deepening debt cycle
Nature:

Relatively high interest rates slows borrowing, stagnates business and creates hardships on individual borrowers. Economic policies in the industrial countries determine interest rates worldwide.

Incidence:

High real interest rates are adding significantly to structural budget deficits in both developed and developing countries.

 

[Developing countries] In the agricultural regions which form the major part of developing countries, agricultural credit to farmers is supplied mainly by local money-lenders and traders. Exorbitant rates of interest, amounting to barely disguised usury, are charged. In addition, the lender is usually in a position to apply, or to threaten, a wide variety of sanctions which, although usually intangible, may maintain the borrower in a situation bordering on servitude, since it may be very difficult for him to pay off his accumulated debts. The lender is often also the local commodities broker-speculator.

Related UN Sustainable Development Goals:
GOAL 9: Industry, Innovation and InfrastructureGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and Production
Problem Type:
F: Fuzzy exceptional problems
Date of last update
06.11.2017 – 19:38 CET