Why interest rates are so high in Africa
Banks generate high returns, but have steep costs
WHEN ROBERT MATSIKO was a young man his grain-milling business in Sheema, western Uganda, was destroyed by fire. These days, after building it back up from the ashes, he is being burned by high interest rates. To buy a new machine he must borrow from a bank at an annual rate of 22%. “You fear to do that,” he says. Many other entrepreneurs feel the same, which stops their businesses from growing.
This article appeared in the Finance & economics section of the print edition under the headline “Borrower beware”
From the May 23rd 2020 edition
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