<P> The microfinance project of "saving through" is shown in Nairobi, Kenya which includes a Rotating Savings and Credit Associations or ROSCAs initiative . This is a small scale example, however Rutherford (2009) describes a woman he met in Nairobi and studied her ROSCA . Everyday 15 women would save 100 shillings so there would be a lump sum of 1,500 shillings and everyday 1 of the 15 women would receive that lump sum . This would continue for 15 days and another woman within this group would receive the lump sum . At the end of the 15 days a new cycle would start . This ROSCA initiative is different from the "saving up" example above because there are no interest rates affiliated with the ROSCA, additionally everyone receives back what they put forth . This initiative requires trust and social capital networks in order to work, so often these ROSCAs include people who know each other and have reciprocity . The ROSCA allows for marginalized groups to receive a lump sum at one time in order to pay or save for specific needs they have . </P> <P> There are several key debates at the boundaries of microfinance . </P> <P> One of the principal challenges of microfinance is providing small loans at an affordable cost . The global average interest and fee rate is estimated at 37%, with rates reaching as high as 70% in some markets . The reason for the high interest rates is not primarily cost of capital . Indeed, the local microfinance organizations that receive zero - interest loan capital from the online microlending platform Kiva charge average interest and fee rates of 35.21% . Rather, the main reason for the high cost of microfinance loans is the high transaction cost of traditional microfinance operations relative to loan size . </P> <P> Microfinance practitioners have long argued that such high interest rates are simply unavoidable, because the cost of making each loan cannot be reduced below a certain level while still allowing the lender to cover costs such as offices and staff salaries . For example, in Sub-Saharan Africa credit risk for microfinance institutes is very high, because customers need years to improve their livelihood and face many challenges during this time . Financial institutes often do not even have a system to check the person's identity . Additionally they are unable to design new products and enlarge their business to reduce the risk . The result is that the traditional approach to microfinance has made only limited progress in resolving the problem it purports to address: that the world's poorest people pay the world's highest cost for small business growth capital . The high costs of traditional microfinance loans limit their effectiveness as a poverty - fighting tool . Offering loans at interest and fee rates of 37% mean that borrowers who do not manage to earn at least a 37% rate of return may actually end up poorer as a result of accepting the loans . </P>

Which of the following is not a characteristic of​ microfinance