> The loans that a poor person will get are essentially so expensive that the only thing they do is making them poorer.

One thing I haven't understood is the idea of charging high interest on poor debtors.

Conceptually the problem is simple. The debtor must repay the entire sum. What if the debtor is unable to do so? It would imply that the debtor is only able to repay the sum partially. But here is the problem. How does charging high interest help the debtor repay the loan? It doesn't. The only difference is that the bank gets the money sooner rather than later. You borrow $1000 and repay $800 and then default. -20% interest for one year. Clearly a bad loan.

The bank charges 30% interest on your credit card. You still only repay $800. The bank got your money sooner. So the only explanation for this is that the high interest rate discourages bad debtors (it clearly doesn't otherwise people would have stopped borrowing at a much lower rate like 10%) or there are people who can repay the debt even at excessive interest rates. They ask family or friends to chip in and a lower interest rate would not put enough pressure on people to take money from someone else.