about getting the poor to pay for the full cost of the services they accessed; such services may pay for themselves but are a major waste of money if they don't provide the services they are supposed to provide, such as developing the local economy. An institution that is able to survive 'on the market' has no value as a development institution if it does not do what it was designed to do. Ha-Joon Chang: Poor people are a high risk group in terms of repayment, so by leaving it to the market they will have to be charged 40% interest rates; hence there must be some element of subsidisation in order to reduce these high interest rates. 3.       Did you also look at some other microcredit schemes such as insurance? Milford Bateman: The original Grameen bank model was failing and so other components were bolted on to the microcredit package in order to make it look like it was working. However these extra 'bolt-on' components were beyond the scope of the study. 4.       Is it possible to rank the problems with the MFIs and which ones are the key problems that need to be resolved? Milford Bateman:  This is not something I attempted to do. However, let me say this. I think one of the major, if not catastrophic, drawbacks to the microfinance model is the fact that it has misallocated finance for many years now. In Latin America, even the Inter-American Development Bank (IaDB) now accepts that here