How does Oikocredit determine the interest rates it charges its parters?

• When Oikocredit determines an interest rate for a loan, we consider several factors including prevailing market rates for comparable transactions (if any) by local banks and other lenders, our own cost of capital, borrower and country risks, development relevance of the application submitted by the bororwer and our own operational cost in providing and monitoring the loan. We use an internal interest rate calculation model to determine what the interest rate to be charged should be. In general, within a certain country, the model works out in such as way that the interest rate charged to a borrower varies with the size of the loan (bigger loans have proportionately lower operational costs), the sector (loans to MFIs are more standard than SME loans which means that we have less operational costs in analyzing and monitoring MFIs) and the borrower risk.  But in the end, no matter the outcome of the model, we do not want the interest rate charged to deviate much from prevailing market rates in the country.
• As an example, in general, bigger loans to large MFIs with a track record (lower risk borrowers) especially in countries with a low country risk, would receive a rate of approximately the cost of capital plus 2 to 4% (EUR). Loans to smaller MFIs, with a brief track record and a high country risk would have interest rates of approximately the cost of capital plus 5 to 7%. (EUR). These rates can vary depending on the development of cost of capital (base rates) and other factors. Oikocredit's cost of capital in Euro's is determined by the Euribor, with minimum of 3.5%.
• Loans made in domestic currency often have a somewhat higher interest rate than those in dollars or euros, factoring in a higher chance of devaluation (partially influenced by higher inflation). 
• Loans approved by Oikocredit in January and February of 2010, include the following, the lowest rate shown below being 8.2% and the highest 15.4%: