Micro- or Predatory-Lending?

In today's Wall Street Journal, an article appeared about profitable micro-lending. The story focuses on the pioneer of a more efficient model of micro-lending in India being able to cut costs and capitalize better on the high repayment rates of micro-borrowers. He has thus turned microlending into a profitable enterprise. One of the main financiers of his efforts declared this brand of microlending to be lower risk and higher return.

ICICI Bank Ltd., India's largest private-sector bank in capital, has gone so far as to give Mr. Akula an open line of credit. The bank says its more than $10 million in loans to SKS have been low-risk and give it a slightly higher return on capital than it gets from its corporate borrowers.

If the risk is so low, shouldn't the microlenders charge a lower interest rate to their customers? Otherwise, should we not conclude that this is a thinly veiled predatory lending practice? Citing "benefactor fatigue", the article suggests that this is a good alternative to more traditional forms of microlending. The ability to generate profits is good, since it suggests that the model is sustainable. Should they not have set up the institution as a mutual (credit union, e.g.) to eliminate return on equity provided by large for-profit banks?