A consumer borrowing Â£100 on the card would be charged Â£35 in interest
on repayments of Â£5 a week over 27 weeks, giving an APR of 222.7%.
Is this for people who already have borrowed from the loan shark and must repay immediately or else? Or do the borrowers simply not understand annualized interest repayments? Of course micro-credit also involves high interest rates (in the 50-100 percent range, usually) but I can see two immediate differences. First, micro-credit is often used to take the kid to the doctor when otherwise the outcome would be grim. Second, micro-credit is usually marketed to the higher-IQ element in the village, not the lower-IQ element.
Addendum: Here is Virginia Postrel, defending consumer credit.