That's all well and good provided that the loan is unsecured and generous (i.e. humane) bankruptcy laws are available.
In India, bankruptcy means a rural farmer will lose everything, including his land and his seed corn.
You can't have it both ways. Either the loan is secured and farmers pay low interest rates.
Or a high rate is allowed because the loans is an unsecured loan with high credit risk.
But then the debter should be able to default without severe consequences, just a damage to his credit rating.
Neither is possible, because India doesn't know what humane capitalism is.
Edit: Sure 24% is better than 300%. So I should congratulate India for leaving the Feudal ages and entering the Robber-baron capitalist era of the 19th century.
Well OK: Congrats India! Now let's enter that 20th century, shall we?
If SKS microfinance is charging 24% they are a loanshark, period.Rates as high as that are usury and should not be lawful.
I'm of half-Indian and half-European descent and I am always ashamed of my Indian heritage.
The Indian people as a collective simply do not know what it means to be humane and have never heard the word solidarity.
I don't mean that Western countries are perfect, just that they are lightyears ahead of India.
Civilized countries have laws that protect the poor. Interest rate limits for people (not corporations) are generally and histroically limited to about 8-12%.
The US exception caused the subprime crisis, but was compensated for the poor by generous bankruptcy laws.
Also, western countries have bankruptcy laws, social safety nets and a lot of private charity.
Even poort western countries such as Bolivia have a minimal level of solidarity so that no-one should feel that suicide is the only way out.
E.g. Alabama: ALABAMA, the legal rate of interest is 6%; the general usury limit is 8%. The judgment rate is 12%.
Like I said, it's not perfect, there are many exceptions. The US has devolved quite a bit from the humane society that built it up.
But generous bankruptcy laws still make it possible for Americans to escape high debt. In India, suicide seems to be the only solution for some.