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 Post subject: The Microfinance Backlash
PostPosted: Sun Jan 16, 2011 11:53 am 
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The Microfinance Backlash -> http://www.npr.org/blogs/money/2011/01/ ... e-backlash

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These are tough times for microfinance.

Politicians in some developing countries are encouraging borrowers not to repay their loans. And a few studies have cast doubt on the benefits of lending small amounts of money to very poor people — a practice that has long been held up as one of the most promising ways to help people work their way out of profound poverty.

The scrutiny has been particularly intense in India recently (see coverage in the NYT, FT and WSJ), but there have also been tensions from Bangladesh to Nicaragua.

there is more


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 Post subject: Re: The Microfinance Backlash
PostPosted: Sun Jan 16, 2011 11:54 am 
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China Sees Explosive Growth in Micro-Credit Companies -> http://english.cri.cn/6826/2011/01/06/1461s613834.htm

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China saw explosive growth in micro-credit companies in recent years, according to a blue paper issued Thursday.

The number of micro-credit companies increased by 4.7 fold to 2,348 by the end of October 2010, from less than 500 in 2008, the China Micro-Credit Institution Joint Council, a self-regulatory organization, said in the paper.

At present, micro-credit companies employ more than 24,700 people nationwide, with total funding of 190 billion yuan (28.79 billion U.S. dollars), according to the paper.

Micro-lending companies have become an important component and supplementary power of China's credit market. They have also been important routes for private capital to enter the financial market, the paper said.


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 Post subject: Re: The Microfinance Backlash
PostPosted: Sun Jan 16, 2011 12:03 pm 
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Wonga.co.uk.

Providing a valuable service at a measly 2,689% average APR.

But just in case this is daunting, here's a funny little cartoon showing how, if you were to engage a taxi service, dvd rental or hotel room for a full year, they would charge you a lot too:

http://www.wonga.com/money/is-this-apr-expensive


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 Post subject: Re: The Microfinance Backlash
PostPosted: Sun Jan 16, 2011 1:25 pm 
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I am really into this micofinance stuff . I am currently expoiting a family of 6 in Mongolia . I am into it for 600 Euro and they always repay and if they don't , I go to the government and say that I am to fat and white to fail . The government bail me out so that I can keep on lending to third world despots who at the end of the day can run to the IMF to repay me . Its win win . I love it . They can go ' interest only ' if they like . ( I love ' interest only ' as it means that they are only renting the money from me and as its a never ending debt I can make even more money on interest while they think that they are getting one over on me ) But no matter what the hardship , I am sure of getting my cash back because of ' Moral Hazard '

Moral Hazard is fantastic . It means that rich people get a free pass because we are important . But other people must be thought a lesson about how important it is to repay their debts . Hey , it works for me and has kept the world turning for yonks . However I am fustrated with the micofiance people because I want to get really involved and being Irish I have a ' spend it when you have it ' approach

In reality , I am currently into a loan to somebody in Bolivia who wants to buy a cow and a taxi driver in Mongolia . I put the money in and over time it is repaid . I then loan it out again and so it goes .


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 Post subject: Re: The Microfinance Backlash
PostPosted: Sun Jan 16, 2011 8:04 pm 
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Interesting link, thanks BoyRacer.

Confirms some research I have been doing in the past, which is that microcredit is a sort of neo-liberal alternative to credit unions and credit cooperatives that has grown up over the last few decades. And that they fulfil a lot of development jargon requirements, but often end up exploiting or dependising the people they aim to "help".

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 Post subject: Re: The Microfinance Backlash
PostPosted: Tue Jan 10, 2017 2:19 pm 
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<massive bump>

wasnt microfinance pushed as being the saviour of the worlds poor?
I thought it was built on the basis that there was no interest on the loans and that one didnt need to repay, but repaying would help securing future loans. How wrong was I.
sell your kidneys to repay the loans http://www.bbc.com/news/world-asia-24128096 <----disclaimer: from 2013

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