Suicides in India show the dark side of micro-finance
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Re: Suicides in India show the dark side of micro-finance
#2"Peepli Live" ( http://www.imdb.com/title/tt1447508/ , available on Netflix Streaming) is a satire about the state of farmers in debt in India, and is worth a watch.
Re: Suicides in India show the dark side of micro-finance
#3India’s booming microlending industry is part of a global phenomenon that began as a charitable movement but now attracts private capital seeking growth and high returns.
Good old capitalism, always there to turn nice things into shit.
Re: Suicides in India show the dark side of micro-finance
#4you can watch the decline of SKS Microfinance the poster boy of Micro-finance in India:
http://www.google.com/finance?q=NSE:SKSMICRO
Re: Suicides in India show the dark side of micro-finance
#5India’s booming microlending industry is part of a global phenomenon that began as a charitable movement but now attracts private capital seeking growth and high returns. Good old capitalism, always there to turn nice things into shit.
And how is capitalism turning it to shit exactly?
Many capitalist systems have this thing called bankruptcy which can be used to escape debts you cannot pay.
This particular shit incident was caused by culture and beliefs, if not mental illness, and a lack legal innovations like bankruptcy, not because people started lending money for profit, which is an ancient practice that predates capitalism and microlending.
Re: Suicides in India show the dark side of micro-finance
#6I wonder how many people killed themselves before microlending existed because they had no hope of improving their lot in life.
Re: Suicides in India show the dark side of micro-finance
#7I wonder how many people killed themselves before microlending existed because they had no hope of improving their lot in life.
It's rather remarkable how able people are to tolerate a borderline existence until a concrete metaphor for its inevitability and hopelessness - like an unpayable loan - is thrust into their faces.
Re: Suicides in India show the dark side of micro-finance
#8India’s booming microlending industry is part of a global phenomenon that began as a charitable movement but now attracts private capital seeking growth and high returns. Good old capitalism, always there to turn nice things into shit.
Microfinance is capitalism. Without it, none of the good you speak of would be available to anybody.
Re: Suicides in India show the dark side of micro-finance
#9[I was involved in a project for SKS Microfinance in a previous job, and I've gotten up-close and personal with their numbers for a few months, all pre-IPO]
A majority of the small-ticket loans are given out under the umbrella called IGLs (Income Generating Loans), which is basically capital for asset development and/or small-time business building. (e.g. the spice shop woman in the article) These are the loans given out at 24%.
One of the issues is that a lot of borrowers take out IGLs and, once they have the cash in hand, end up spending it non-income generating activities, like weddings, or funerals, or baby births, or girl-child-attaining-puberty ceremonies.
There is another class of loans called ELs (Emergency Loans) that are interest-free, and meant for 'unforeseen emergencies' - typically critical medical treatment and funerals.
So yeah, when you take a loan at 24%, but spend the money on a 0%-loan-activity, problems abound.
There is a fairly large amount of education and training that has to take place amongst the local populace in terms of fiscal responsibility, and significant cultural obstacles to overcome to teach it to them.
Re: Suicides in India show the dark side of micro-finance
#10"Peepli Live" ( http://www.imdb.com/title/tt1447508/ , available on Netflix Streaming) is a satire about the state of farmers in debt in India, and is worth a watch.
wish i could upvote you twice for 'Peepli Live'. absolutely a must watch.this movie has a more real depiction of state of affairs , though obviously with a polarised satirical tone.