In this video Richard Rosenberg, consultant to CGAP, speaks about the controversy around the IPO of Compartamos Bank Mexico, one of the leading MFIs in Latin America and the interest rate debate it fuelled. Going behind the controversy, Richard says Compartamos problem began when it went into private hands. Before that the bank’s proceeds were used for development. However, the bank needed a license to expand and was converted into a private concern. In a basic model of microfinance, interest rates charged is high and when the bank was privatised the profit money started going into private hands or private parties that led to Compartamos controversy.

Leave Comments