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Does ‘microlending’ actually fight poverty?

boston.com

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Re: Does ‘microlending’ actually fight poverty?

#11

Post by HeyLaughingBoy »

JulianMorrison wrote: post #2

Entrepreneurial skill is a rare human trait. But they lift the rest of us beyond starting from scratch with flint and bearskins, so it shouldn't be dismissed just because it isn't universal. Have those same studies looked at accumulation of capital and infrastructural reinvestment in regions saturated with microcredit? I suspect a left wing bias that views the rising few with suspicion.

I disagree. But I can admit that it depends on your definition of entrepreneurial.

My definition is simply someone who goes into business for themselves as opposed to getting a job. Taken that way, most people will be entrepreneurial given a good enough reason; and it's far from rare.

Also, it's surprising how many people work full time and have small side businesses they run part time. I believe I read a report that said the majority of US businesses are part-time, one-person only.

Re: Does ‘microlending’ actually fight poverty?

#12

Post by ngs »

herval wrote: post #9
JulianMorrison wrote: post #2

Entrepreneurial skill is a rare human trait. But they lift the rest of us beyond starting from scratch with flint and bearskins, so it shouldn't be dismissed just because it isn't universal. Have those same studies looked at accumulation of capital and infrastructural reinvestment in regions saturated with microcredit? I suspect a left wing bias that views the rising few with suspicion.

IMHO, entrepeneurial skill is not a 'human trait', gift or anything - it's just a skill, like any other - you can develop it if you absolutely need it to survive (usually the case for microlenders). I'd say the reason why there are usually less entrepeneurs than 'normal' people is more on taste than 'talent': if you're doing just fine with a paycheck, why bother?

IMO, entrepreneurialism is an inate human trait. However, this doesn't mean it's expressed in everyone you meet, day-in-day-out. It clealy isn't. It's possible technology is simply an accidental expression of this trait. Which is interesting yet terrifying if true.

Re: Does ‘microlending’ actually fight poverty?

#13

Post by kiba »

JulianMorrison wrote: post #10
herval wrote: post #9

Earlier quoted context omitted.

IMHO, entrepeneurial skill is not a 'human trait', gift or anything - it's just a skill, like any other - you can develop it if you absolutely need it to survive (usually the case for microlenders). I'd say the reason why there are usually less entrepeneurs than 'normal' people is more on taste than 'talent': if you're doing just fine with a paycheck, why bother?

I'm curious to see your evidence. I have noticed in life many businesses that pay the salary and the rent, but I wouldn't count them as entrepreneurial - they lack the explosive upward trajectory, and I don't think I was just seeing the slow part of the exponential. Real skill as an entrepreneur seems to me more like perfect pitch - a mutation.

Part of being an entrepeneur is the ability to exploit information from not only prices, but also non-price information that would be hard to find from simply looking at prices.

Another part is the ability to marshall resources to capture these opportunity. That may take a perfect pitch, an eye for talents, or something else entirely.

Re: Does ‘microlending’ actually fight poverty?

#14

Post by herval »

JulianMorrison wrote: post #10
herval wrote: post #9

Earlier quoted context omitted.

IMHO, entrepeneurial skill is not a 'human trait', gift or anything - it's just a skill, like any other - you can develop it if you absolutely need it to survive (usually the case for microlenders). I'd say the reason why there are usually less entrepeneurs than 'normal' people is more on taste than 'talent': if you're doing just fine with a paycheck, why bother?

I'm curious to see your evidence. I have noticed in life many businesses that pay the salary and the rent, but I wouldn't count them as entrepreneurial - they lack the explosive upward trajectory, and I don't think I was just seeing the slow part of the exponential. Real skill as an entrepreneur seems to me more like perfect pitch - a mutation.

an entrepreneur is "a person who organizes and manages a business undertaking, assuming the risk for the sake of the profit."

so your definition of entrepreneur is probably a bit narrower than the usual definition... :-)

Re: Does ‘microlending’ actually fight poverty?

#15

Post by herval »

JulianMorrison wrote: post #10
herval wrote: post #9

Earlier quoted context omitted.

IMHO, entrepeneurial skill is not a 'human trait', gift or anything - it's just a skill, like any other - you can develop it if you absolutely need it to survive (usually the case for microlenders). I'd say the reason why there are usually less entrepeneurs than 'normal' people is more on taste than 'talent': if you're doing just fine with a paycheck, why bother?

I'm curious to see your evidence. I have noticed in life many businesses that pay the salary and the rent, but I wouldn't count them as entrepreneurial - they lack the explosive upward trajectory, and I don't think I was just seeing the slow part of the exponential. Real skill as an entrepreneur seems to me more like perfect pitch - a mutation.

with regards to becoming an entrepreneur for simple need, I've seen this happen a lot in my country (specially in my region, which is quite poor): a lot of people doing business simply because there aren't really any other options. Same happens in the countryside (many people don't see agricultural activity as 'entrepreneurship' though).

Also, the number of startups tends to rise during recessions could be interpreted the same way: the more people lose their regular jobs, the more entrepeneurs enter the rig. Talented or not, willingly or not... [1]

[1] http://www.wired.com/culture/culturereviews/magazine/17-06/n...

Re: Does ‘microlending’ actually fight poverty?

#16

Post by johndoe77 »

I would say yes. The 2006 Nobel Peace Prize was awarded to Muhammad Yunus of Bangladesh for helping millions.

http://www.rediff.com/news/2006/oct/13nobel.htm

Former President Bill Clinton just name dropped Yunus on The Daily Show this week. He mentioned that a microlending bank has up popped up in NYC.

Re: Does ‘microlending’ actually fight poverty?

#17

Post by mbrubeck »

tigerthink wrote: post #3

>They created their controlled experiment by altering the algorithm the bank used to evaluate creditworthiness so that some borderline applicants were randomly denied loans while other otherwise identical applicants had loans approved. So maybe the banks need to set a higher threshold on who they loan to. This doesn't say much about the effectiveness of microcredit for well-qualified applicants.

Yes, exactly. In fact, this could be interpreted as evidence that the bank's standards are close to ideal. The loans have a basically neutral effect on the marginal borrowers (the only borrowers included in the Dartmouth experiment), which is exactly what you hope to see if you're trying to draw a line between people who would be helped by loans and those who are more likely to be harmed.

Re: Does ‘microlending’ actually fight poverty?

#18

Post by anamax »

johndoe77 wrote: post #16

I would say yes. The 2006 Nobel Peace Prize was awarded to Muhammad Yunus of Bangladesh for helping millions. http://www.rediff.com/news/2006/oct/13nobel.htm Former President Bill Clinton just name dropped Yunus on The Daily Show this week. He mentioned that a microlending bank has up popped up in NYC.

The Nobel Peace Prize has been given in recognition of several dumb ideas.

Re: Does ‘microlending’ actually fight poverty?

#19

Post by trjordan »

tsally wrote: post #6

Well, last time I checked microlending had a repayment rate over 90%, so it certainly must have some impact. If it wasn't effective in fighting poverty, I doubt you'd see such a high repayment rate. Will microlending alone solve the problem? No. But it's one of the best tools we've got so far.

Did you read the article? The point seemed to be that it certainly smoothed out some peoples lives, it did not actually have a measurable effect on the wealth of either their families or their communities.

It struck me as something closer to credit cards for all instead of business loans for all. When you're poor, credit can help carry you through periods where you might lose a lot due to unlucky circumstances, but it will not actually increase your productivity or efficiency. Repayment rate has nothing to do with long-term social impact.

Re: Does ‘microlending’ actually fight poverty?

#20

Post by philwelch »

anamax wrote: post #18
johndoe77 wrote: post #16

I would say yes. The 2006 Nobel Peace Prize was awarded to Muhammad Yunus of Bangladesh for helping millions. http://www.rediff.com/news/2006/oct/13nobel.htm Former President Bill Clinton just name dropped Yunus on The Daily Show this week. He mentioned that a microlending bank has up popped up in NYC.

The Nobel Peace Prize has been given in recognition of several dumb ideas.

I think it's been awarded multiple times for "solving" the Israel/Arab conflict.
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