The Dark Side of Microfinance
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- čas přidán 2. 05. 2022
- Microfinance, once hailed as a miracle cure for poverty, has become a lending system run amok -- and institutions that could help fix it are feeding the frenzy. For more: www.bloomberg.com/graphics/20...
#Storylines #Economics #BloombergQuicktake
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For more about the microfinance controversy: www.bloomberg.com/graphics/2022-microfinance-banks-profit-off-developing-world/
Same situation in Cambodia, Loan officer often has no manner to claim their loan aggressively. Some debtors need to sold their properties in order to paid back loan.
@Bloomberg Quicktake: You should elaborate PT. Bank Rakyat Indonesia (Persero), Tbk. as a success story of microfinance since this company is the biggest microfinance in the world. The company can balance the interests from various stakeholders from the shareholders, borrowers, government, and other related parties. Microfinance can be the solution for development and profit.
I think the interest rates is what makes microfinance dark
I thought the whole point if microfinance was to give micro business loans to boost the economy. Most of the examples were personal loans to those who could never pay it back.
The whole point me business is to make a profit
No it's not right. I am from India, here micro-finace companies are providing group loan. Where if one person miss the emi, others will pay. And they are paying. One of my family friend was working in the micro-finance company.
In my opinion this micro-finance concept is flawed. Md. Yunus got noble price mistakenly. Western got amazed by poverty allevation flag. Micro-finance is destroing the poor people. Let me explain.
1) Poor people pay 24% to 30% interest yearly.
2) They pay weekly EMI
3) Also there is some processing fee.
4) 1st EMI will be deduct from loan amount.
5) Most of people take loan for personal use. Not for business. No one cant't do business withweekly EMI.
My question is if someone wants to help poor people, why the are charging 24% interest. When a business loan available @ 10%. They are puttimg burden on poor people. Most of microfinance get lots of donation but they domt provide that. This microfinance should stop. Bank should come forward to provide financial service to the poor
I am from India, here micro-finace companies are providing group loan. Where if one person miss the emi, others will pay. And they are paying. One of my family friend was working in the micro-finance company.
In my opinion this micro-finance concept is flawed. Md. Yunus got noble price mistakenly. Western got amazed by poverty allevation flag. Micro-finance is destroing the poor people. Let me explain.
1) Poor people pay 24% to 30% interest yearly.
2) They pay weekly EMI
3) Also there is some processing fee.
4) 1st EMI will be deduct from loan amount.
5) Most of people take loan for personal use. Not for business. No one cant't do business withweekly EMI.
My question is if someone wants to help poor people, why the are charging 24% interest. When a business loan available @ 10%. They are puttimg burden on poor people. Most of microfinance get lots of donation but they domt provide that. This microfinance should stop. Bank should come forward to provide financial service to the poor
@@RatanGain 24% is better than no loan
Too bad poor people cannot manage money well.
You can´t hardly boost the economy with jobs in the informal sector. It´s proven that it doesn´t. The main goal was to lift millions of poor peole out of poverty. Not everyone is a entrepreneur, and a third flower shop in the same area puts other vendors out of business. Often these loans are used for medical treatment, for other debts, for consum etc. This does not work, not for the people, not for the economy, but for the microfinance institutions.
The concept was microfinance was actually help small business get loans to start their businesses or to scale up their existing businesses. it was never meant to extend personal loans to people
Correct
Micro LOAN for msme was meant for business start-up
yes, thats what the entire video is explaining...
Welcome to the real world.
I interned at a Washington D.C.-based MFI in Afghanistan. What a joke. Pakistani country director was making $20,000/mo. His Pakistani CFO literally couldn't do basic accounting and was making $10,000/mo. (it got so bad that they had to hire third-party accountants to do his job for him). It was a cabal of aggressive South Asian conmen. The locals had their hands in the pie too. No internal controls to speak of. All of this led to a multi-million dollar fraud, courtesy of the U.S. taxpayer.
It was just as bad at their headquarters in D.C. All of them seemed to be rejects from the investment banking world. A complete disaster.
My advice: use technology to cut down on staff as much as possible. In my experience, upper management was the real problem.
A lot of these NGO are grifters.
Let’s face it - being in debt rarely helps people and often such loans will be taken in desperation rather than to finance a project or business plan.
Very true. Unfortunately I'm guessing many of these borrowers never intended... or had the ability to pay back these loans from the start.
Being desperate will make you do some very foolish things.
7:25 Explains it all. These poor people are in the wrong. They wanted to buy a plot of land to live on and build house. That is not the purpose of microloans or regular short term or long term loans. Its purpose it help people develop the means to make money by financing capital equipment like tractors, cash crop seeds and other equipment. Too many of these 3rd world people want something they get in Europe all encompassing welfare paid by someone else but within their own national borders.
@@guardianoffire8814 Very true. Micro lending for "personal needs" isn't a great idea.
face it - all our financial world is based on debt, all fiat money is debt
@@pikatrader3177 It's a double hit going into debt with fiat.
A Microfinance is similar to a Payday loan in the West or a credit card issuer ! They should be regulated in a similar way or should be elevated to a Credit Union ! Also the fact that these " financial firms" ask for no collateral all together should be worrisome
Wherever there is money to be made, it tends to attract the worse of humanity.
Says something about capitalism on overdrive tendencies of today...
BS
it takes a certain level of inherent sociopathy to say i can help you but it depends on what you can give me in exchange.
@@priyojitchatterjee6164 true. As much as we can pounce marcist idea, the exploitation by the rich few is very possible and its kind of happening.
@@wecare838 marxism is a whole other level of exploitation. the problem of hierarchy is inherent to human nature because prosperity is itself unique to humans. you dont see lions exchanging goods or services. the most they can do is not get in each others way. empathy is an evolutionary disadvantage if its doesn't result in personal benefit.
This is the situation in Nigeria where loan apps and micro finance banks rather than helping small businesses they are bankrupting those businesses but are heavily funded locally and internationally as helpers of the same people they are preying upon.
If e pain you, educate our ppl to not take the loans until they have a solid business model
now this is a topic i'm really interested in. thanks bloomberg
as expected when IMF and world bank entered the project it has gone rogue and deviated from its original aim
I think the microfinance model needs to focus more towards extending working capital support to businesses to enable job creation and empowerment.
It was originally made only for that
Issue with it is that the finance should be used to set up a small business, for example a small farm or other business that require start capital. Unfortunately greed always comes into play.
"you don't take into account you are going to pay interest"
"Each adaptation if useful is preserved"
I remember reading about Muhammad and his microfinancing activities back in 2008 while I was still a management undergrad. And being someone who came from a developing country, I knew it there and then that it won't work if it scaled up. Muhammad had great success because he personally knew the borrower's and what they going to do with the money. Whereas banks just care about revenue and profit, they're not going to sit down with you and talk about your kambucha stand, or your little bed & breakfast.
While the problems you say are exactly the problems that faced by many MFIs in India, but none the less they have scaled up pretty well. And also unlike in other markets, thanks to relatively tighter regulatory environment, the Indian MFIs have done pretty well. Of course its not to say that it is perfect in any way, but its nowhere near as bad as what is shown here.
Global development banks do a superb job of capturing the governments of poor countries. Microfinance works in tandem, pushing debt directly on the poor people. The cash upfront is irresistible but who is really benefiting from these feel good programs? Great report.
I hate companies like these, either provide a low interest loan of 2 - 3 percent interest and if they cant pay help them to teach them how to use their loan money to improve their earnings or provide a long term loan and if they can't pay one month let them off just keep it on their account of missed payment, eventually one day they will pay it back, you can't expect much more, you need to provide the help
The problem here is they are looking at it as a business opportunity rather than trying to help them out of poverty. All the beautiful stories they sell is just to impress the shareholders and keep up the stock prices. The interest rate is so high is because of high number of defaulters and irregular payments.
Not all who borrowed has the intention or ability to repay unfortunately. How will the companies absorb these loss by charging 2-3%?
Your statement is too idealistic. In the real world, every company eventually will be driven by profits unless there are state funded regulations or tax incentives
Then go start your company
Banco Compartamos is a vulture bank, they give out loans with interest rates over 100% anual, they also started giving out group loans, they will take give out small loans $500-1k to each person, and when people within that group starting folding on their payments, they would start charging the interests and the loans to the other people in the group loan, it would always end up with one person taking all the debt from the people that didn't pay, usually it would be the person that had a house or some land under his/her name and that the bank was threatening with seizing.
Then the group need to vet the loaner better
Very eye opening, as a long time Kiva donater. Currently reading “The International Bank of Bob.” One key issue here is financial literacy. I once co- taught a class called “Ready to Rent,” which folks needed to successfully complete before getting subsidized housing. A similar system could be used for borrowers.
Kiva lender here too, also agreeing very much on education. I come from a so-called developed country and people are given zero education on how to borrow money, but even on how to manage their finances and things to know about their job (laws that apply, their right on the workplace, sickness leave, how to read a pay slip, etc.). Knowing this would be enormously beneficial. I think it should start in schools.
It's so weird to see both sides of this argument and to see that they seem to be both wrong.
If I could summarize it, it seems like one side believes the fault is in the capitalist system and the greed of those who first dreamed up these programs. The other side believes that loans were made with the same fairness that they would be given anywhere else and that the risk of fees should be there to prevent people from using these funds in entertainment, improvement of quality of ownership, or other actions not specified in the terms of the loan.
To the first point, I am sorry to say that people did have good intentions and their problem was one of miscalculation rather than malice or greed. Let me explain:
The initial introduction to the system worked because it tapped into the pool of individuals most likely to have done a lot of work in planning and implementation but did not have the capital to get fulfill the demands of the business. This is a lot like the house loans given for housing before the 2008 crash. Once too much capital entered the market, as they seem like a safe bet, money was given out without much vetting for sound ideas. Those who then fail (at no fault of their own mind you, since financial literacy is low) at the endeavor are then stuck in a worse situation than before the loan was made, as fees escallate.
Now to the second point, no, loans, as they are authorized in rich nations, do not translate well to the needs of citizens of impoverished nations. This is because those in the rich nations' credit scores provide a history of finances, on average they have a larger disposable income that can be used to pay fees, and one must also take into consideration government systems that attempt to relieve poverty in their populations. This leads to more than one opportunity in a lifetime to attempt financial risks but probably profitable gains.
So, without these factors, does it mean that these people are out of luck in trying to get capital? Not really... All you have to do is create a system that loans money and takes a percentage of earnings only if enough profits in the business are materialized (Or shares-like). Failing to complete the terms does not mean you have to pay fees or even owe the money lent to you. Instead, you are barred from asking for more money unless you are able to prove that the events that caused the failure were outside your power, or you can prove that your new idea can make the lender overlook the past failure.
It's a way to turn Loanshark tendencies into mentorship and patronage since the success of the larger firm making the loans is tied not to the ability to achieve repayment but rather its ability to mentor success.
But hey maybe I'm wrong. I'm just a person on the internet who has no way of realizing this system... for now... I'll let you know how it went if I ever do though lol
your idea of mentorship by the loan firm is already implemented here in indonesia, where we have "farmer's bank" which are responsible on both giving training on farmers as well as distributing productive loan. however at the same time, we also have microfinances distributing consumptive loans, which people use to buy newest smartphone and nice motorcycle. so we still ends up with the same problems, just like what happens on all those countries reported in the video.
my opinion on this matter is that, we need to start acknowledging that consumptive loan is dangerous, especially if you don't have enough financial literacy. if we can't completely ban consumptive lending altogether, it should have - at the very least - a big warning sign and scary pictures, just like the one in cigarettes box.
@@yudhihamzah Thank you so much for the tip. I'll look into the details of the Indonesian farmers bank system. It does sound very interesting. At the very least its comforting to know that people around the world are trying to solve problems and even if slowly do become aware of their shortcomings.
@@yudhihamzah humans will be human. They generally mismanage funds. And other humans will take advantage till someone with better idea comes along.
"all you have to do is create a system" mate Im sorry to say but this system will never be sustainable under this economic system - looking at your idea, I don't think there's much profit to be made. If there's no profit to be made easily, it wouldn't attract money from the private sector and the idea will at best be done entirely by the public sector, meaning it would be no where near as big as microfinance is today. Perhaps that is fine, but with that impact I doubt it will ever live up to the expectation of solving poverty like it was intended to be
Random question but where did you get your knowledge from? Just wondering, seems well researched
Came here while reading Poor Economics. Kudos to the team for covering such crucial issue 🙌
The interest rates are double and sometimes triple that of a traditional loan.
And? No one's forcing them to take the loan.
Demand and supply
Nice topic. Thanks. We should take this and apply to future policy-making. Safeguarding the borrowers and policing the interests of the bank and microfanciers
come-on they took on the loan they know what the interest rate is why should financial institutions be force to give artificially low interest rates to people that dont know how to do basic personal finance a better solution would be to offer personal finance classes in low income areas
Nothing stopping you from safeguarding these borrowers. Not enough to just talk
Even the noblest of actions can be perverted by todays financial institutions.
its just capitalism
30 $
Monthly payment ??
On what kind of revenue stream !
Cheers from west Africa
🦅
in this case greed is masked by hope, and warnings are foggy in the desire of a positive outcome. any concern that victims are financially illiterate is written off as patronizing when even us that are given so much advice still mistakenly trap ourselves in the financial system. it was doomed from the start
Christ. I thought kiva was going to come up here but how effective are their safeguards? I've been lending on that platform for a while now and I'm a little worried.
Interest payments are a big problem for personal loans, the governments can extend money to local lenders for disbursements with proper due diligence that is the money should not be used for illegal purposes.
Not because they cant get bank accounts, banks and other financial institutions are very far from them , or the requirements to open such bank accounts are out of reach for some people .
same situation in kenya...honestly speaking
Having a deal with microfinance meaning getting loan from microfinance is like dealing with devil
So true!
whats the name of the music @4:26?
She set herself on fire and there are no burns?
You can see the scars on her chest
crazy... these people who borrow these loans are not a business owner. these microfinance should have denied them for taking these loans to buy land and/or whatnot.
I truly believe that microfinance always gives more harm than benefits. What they did was make benefit the poor, rather than help their financial problems. Too many cases is similar to the documentary in Indonesia.
3:55 Called licenced loan shark in Asia.
So basically microfinance are legal loan sharks
You can't stop nature
People always ask what is a risk. The risk is when a "good" thing go unexpected. Therefore you should be a bit more subjective when listening to "good" advice.
Yes…it’s probably better to force those institutions to give the money deliberately, otherwise people may not be able to pay, right? Or, perhaps, let them have it with the loan sharks…
So why haven't the public sector banks moved into microfinance? I assume the self interest/profit maximization aspects would take a back step.
Because government giving debts only to write them off would be the same as printing money out of nowhere. Helping out poor people isn’t usually a top priority for governments where these micro finance vultures exist. Even in developed countries with all their fancy consumer protections, governments minting billions to bail out big corporations during recessions even as people go hungry and unemployed isn’t unheard of. In the end, your life just matters less when you are poor, your voice falls on deaf ears and that’s the sad world we live in.
In India the public sector banks actually do a lot of the micro-finance. A majority of the source of funds of MFIs in India is public sector banks, since MFIs in India cannot take deposits directly. Its only recently that the largest MFIs in India have gotten other sources of funds reducing their dependence on PSBs.
Mohammad Yunus, who is from my country tried to advertise it as the go to solution for eradicating poverty. He has never admitted the Micro finance system is faulty, instead he argues about wrong intention of lenders. My say is if you really have good intention you don't need to lend money with interest, you can teach them skills,provide them health care education or build small factories and give them works to do. China never had this scheme but came out right. Yunus should not advertise it any more.
No interest, no donations, no loans
Imho what they need is some KYC regulations. Don’t provide loans to people with no credible means to pay them back. Have them provide info on their income, business plan etc. and then only provide the loan if these things make at least some sense.
This is precisely what happened and that's why they can't get a loan from the regular banks.
then they're no different then regular banks
Nobody is going to do all that jazz for a $100 loan
Take a wild guess which countries are giving these predatory loans!!!
I loaned money to a couple of people here in Perú. Campesinos. Very small amount.. They couldn't pay!! A mistake on my part.. And a little education!!
It isn't the dark side of "microfinance". It's loan sharks who have taken on the "microfinance" label to gain a veneer of respectability and government support, while their core activity remains preying on people's distress to make money.
This is a real issue so if you’re donating on Kiva ensure you set your filters to help mainly the who charge low interest and lend responsibly so have low default and delinquency rates.
Low interest = low donations
@@mikolowiskamikolowiska4993 feminists can give loans without interest to women, hehe. also I am sure they don't care even if its not paid back.
In Bangladesh microfinance has significantly contributed to empowering poor women and increasing income and assets of the poor thanks to MFIs like Grameen Bank, ASA and BURO -- especially Grameen Bank, which is the pioneer of microfinance. Today Grameen borrowers' deposit with the bank (USD 1.90 billion, non-borrowers have another USD 827 million deposit with Grameen Bank) is much more than their loans with the bank (USD 1.63 billion). From the beginning MFIs in Bangladesh have worked responsibly due to the oversight of their founders especially Nobel Laureate Professor Yunus. Grameen even introduced some unique steps long ago like Struggling Members (beggars) loan (zero interest and with highly flexible repayment schedule), loan insurance and life insurance schemes, scholarship and low interest higher education loan for borrowers' children, low interest housing loan, Village Phone loan (in collaboration with Grameenphone, the biggest phone operator of the country) etc. to help borrowers accelerate their development and fight odds.
Sadness!!!
From charity to profit seeker.
Even Kiva has a spotty record
So these mfi companies have become sanitised loan sharks. How can you lend and not explain interest plans?
wow, anyone who can't come up with a better line than "we're not as bad as loan sharks" needs to hire a publicity consultant right away.
irresponsible credit puts people in an unsolvable financial position. the oposite can actually help
Can't afford the opposite
"the love of money is the root of all evil" and from my years of studying the subject - the international bankers are the root cause of much of the world's troubles...
No
The love of money is not the bankers
Microcredits are not to blame here. The problem is that people don't have financial education. If you borrow money, you have to pay it back, it's not a gift.
No, who's to blame is the creditor who lend money towards people who cannot guarantee to pay it back. Creditors ought to bear the risk of the loan not getting paid.
@@demosiac8036 So the creditor lends money without any solicitant? You don't ask money, but either way someone lends you money soy now you have to pay it back plus interest? Is that how it works? I don't think so
This is predatory lending. The bank gives you money knowing you will likely not pay and then if you can't pay sells your stuff for more than borrowed. They know these people are not educated enough to understand what they are signing up for. They use that to extract the little wealth they may have for themselves.
@@Macxermillio I find a hard time taking that. Because it come from other native people, and it's aimed to improve small business, not to buy land and build your house, 'cause it just don't prodcue money.
@@daianpeter5089 Exaclty, that's predatory. They shouldn't be giving personal loans. They know the person won't be able to pay because they aren't running a business. They are looking to take what little they have.
leave it to corporate greed to take a good idear to make it have a toxic outcome
The threats and harassment don't sound much different then all government tax collection agencies use when they come calling!
Banks are no different then insurance companies.... they are out to make money by making promises they will never deliver on... and take your money.
The difference is that you have the option not to take a loan from one of these lenders.... but when it comes to taxes and the government... you don't.
Indeed
We’ll just don’t borrow money you can’t pay back…
12:42 Ben
I can't see how those people get into that kind of troubles. Debt is quite clear tho. You get the money, you pay it back, plus interest. It's simple math. If you can't afford it just don't take the debt and live a simple life.
So sad
Didn't someone get a Nobel for this?
yes Obama
Ppl get Nobels for a lot of virtue signalling
Help he who is next to you why go help someone across the world when your naibour Could use the help.
more and more like this are happening everywhere including USA. People are using "BNPL" bussiness. They dont advertise themselves as banks or anything but the concept is very similar. so everybody is doomed and not just 3rd world countries.
Just give the money to SBF and let him solve the problem.
A translator would've helped. Had to leave. I was very interested in what these people had to say and the use of subtitles as oposed to translator made it impossible to get the story.
You have to follow the system! Many women are successful in Bangladesh!
I'm a Srilankan I know how it all works
I started a microfinance company with the intention of helping people who could not get loans from banks while making a small profit(small interest). The truth is most people who approach micro-lenders are a high risk and usually take out loans to survive out of desperation, which means they usually don't have a plan of how they are going to repay the loan. Sometimes they cannot afford to pay the principal amount they took out in the first place. The loans are unsecured and the borrower can lie about how they are going to pay it back. At first I was understanding but then I started to suffer as I was losing money, the money that I needed for my livelihood. That's when I realized that I have to get my money back (at least the principal amount) by any means necessary. People never want to see things from the micro-lender's perspective. They are ordinary people who are risking their hard earned money.
Sure - but if you are going to lend to unsophisticated borrowers, burden kind of falls on you - rightly so. You should be able to set capital restrictions and appropriate lending caps. I think the argument that you are then losing money is thin, it’s super high risk and you can cover your backside by exercising prudence, having a better way to model risk - or do what the loan sharks do and rely on aggressive collections and hidden fees ( which then means you’re not playing in the MFI space anymore)
@@ThabiPoopedi if unsophisticated borrower is going to borrow, burden also falls on them. It goes both ways. Nobody bats an eyelid when unsophisticated ppl put their hands in fire and learn to not do it
I knew this was gonna happen. Vultures.
Is this the famous "debt trap"? 🤔
Poverty continues even though there has been lots of help. Maybe it's the helpers. If a lack of money is the problem just give them some money.
Poverty continues cos ppl are lazy
If they really wanted to help they’d also send in someone to help them manage finances, provide equipment, and send in people to help farm. If we really wanted to help we would ask the people directly what they needed, provide it and not expect anything in return. This is just pure greed.
I'm a South African and I believe my country has the best citizens protection laws in the world. Far better than the US. Unfortunately, the US is a corporation and not a government 😕.
Are governments capable of lending that much money to everyone in need? No. In my country, Out of 100, less than 10 micro credit borrowers default on an installments and most of them are able to repay within 90 days past due date. So 90 people are actually able to change their lives. Nothing is rosy in this world. There are negetive and positive to everything
If they enter into contract, they have to pay loans back. Why would lenders take the risk otherwise?
creditors need to calculate their risks if they lend money. debtors defaulting is part of a bank's business. If they lend money to people how obviously can't be expected to pay it back, it's their own fault for lending it.
@@AaronGruber They do calculate the risk, they even use AI nowadays to do it. The higher the risk, the higher the interest charged for the debtors. It may seem unfair, but it is simple math, otherwise, there would be no credit at all. And of course they anticipate that some people will not pay, but if they would write off debts easily, other borrowers would start to not pay, seeing that they can get away with theft. Therefore, these companies to stay profitable has to exert pressure, to ensure any profitability and survival at all.
@@AaronGruber well your argument is weak. If the lender got into debt trap, it's their own fault to get a loan with the high interest rate. The company exists from the market demands. It's like drug dealer. If there's some who got into overdose, then it's his fault taking too much drug. the bank know that the lender is very UNLIKELY to pay the loan back, so they put high interest to it (to cover other defaulted loan portfolios). It is simple math bro.
Half truths. In India it's regulated by the RBI and only those who have bank accounts can get
The problem here is lack of financial education. The woman interviewed at 7:05 mark in the video said she borrowed money to build a house and confessed that she didn't take into consideration the interest incurred. It's just bad decision and she got herself to blame.
Why not blame the companies that are actively seeking out these individuals because they know that these individuals are easily exploited?
Do you think that microfinance would have been as popular 15 years ago if it was explained that developing nations had to provide sophisticated financial education for all of their citizens, because otherwise unscrupulous lenders would take advantage of them for profit? I don't think that was mentioned by the Nobel peace prize commitee
@@jirehjirehjireh do you blame a carnivore for seeking out prey. No one wants to starve
Who's going to pay for said education
True
How much did she borrow? What did she use the money for?
No such thing as bad dark side
It helped to create more jobs and opportunities than negaitve side
Imagine that, people notoriously bad at managing money ended up not paying back their loans. What a surprise.
4:05
Microfinance loans? Who really believed this made any developmental sense? Who?
Debt trap
Loan Sharks, Enslavement, Pass the Buck... some old story.
In Bangladesh, story is different. Microcredit helped a lot of people to come out of poverty. This type of lending is totally different from other type. Grameen Bank, established by Prof. Yunus started microcredit here. BRAC and some other NGO are also practicing this here. They find unemployed people, mostly women, give them business idea (simple household production like chicken, goat, fish), give them capital, training, help them to sell their product. Even if they fail to pay back this loan for some reason, there is no penalty like jail for this. Besides this loans don't have any mortgage. Their activities helped Bangladesh a lot to alleviate poverty.
Familiar
It was hailed as such a wonderful program. But is actually a micro loan sharking.
I’d like to start a micro loan company and do it the right way. Too many taking advantage of the poor and marginalized.
You'll end up out business and bankrupt. Some people take out loans that they can't pay back and if they know that person is too soft, such individuals would simply take advantage of the bankers. It goes both ways.
Bro. Take my advice. No soft people started a microfinance company. The lending business is super risky business. Once you go soft over the loan application, you will lose all of your money. The lender will take your money and never pay it back. Even the famous gramin bank implements a social punishment, to make the lender pay the loan back.
You will realize that often they don't have any money to pay you back.
I'm no longer waiting for GRANT LOAN because I earn $29,700 every 10 days recently
Same here although got some help anyway, still new on all this but am happy am in
the penny save is the penny earn
please all the people which are reading my comment think before taking loan
It is sickening how some wealthy people take advantage of the poor.
MFIs are just like loan sharks with suits and offices
feels like the entire thing was a trojan horse to monetize the poor
So micro finance, at least in the case of LOLC, is basically loan sharking. Gotta love capitalism without the compassion
Hii
Someone should probably tell these people that when you borrow money, you have to pay it back. That's kind of the whole point of a loan.
creditors need to calculate their risks if they lend money. debtors defaulting is part of a bank's business. If they lend money to people how obviously can't be expected to pay it back, it's their own fault for lending it.
@@AaronGruber Sure. That's why they have debt collectors and seize their assets, like that woman's house.
Then why is the world government and Nobel prize committee promoting micro-financing?
Why do you think?
Haha, count on human beings to do the shittiest things to each other. It never fails.
He won a Nobel peace prize for loaning people small amounts of money?????