http://www.nytimes.com/2010/04/14/world/14microfinance.html?pagewanted=1
Competition and greed might be the main culprits for the atrocious rates. When did an organisation cross from “let’s help the poor get out of poverty” to “how to make more money”? What drives the microfinance institution? How did an organisation lose the essence of its existence and digress to fight for the top lending position? Check. At the end of the day, what kind of question did the top guy ask his employee? Was it, “how many people did you help today?” or “how much interest did you make for the company today, have you hit your KPI!?”
We do a 10% flat which is shockingly low, but we are lending in a way that is barely lending - it's so screened and supervised, because failure has such a high emotional impact on them. It's certainly not to make a profit, every loan is an immediate loss from risk and the work to supervise and help.
Oh, did anyone say, “No harm charging high interest rates, it’s win-win anyway”? Well then, should it be named “microfinance” in the first place?
Competition and greed might be the main culprits for the atrocious rates. When did an organisation cross from “let’s help the poor get out of poverty” to “how to make more money”? What drives the microfinance institution? How did an organisation lose the essence of its existence and digress to fight for the top lending position? Check. At the end of the day, what kind of question did the top guy ask his employee? Was it, “how many people did you help today?” or “how much interest did you make for the company today, have you hit your KPI!?”
We do a 10% flat which is shockingly low, but we are lending in a way that is barely lending - it's so screened and supervised, because failure has such a high emotional impact on them. It's certainly not to make a profit, every loan is an immediate loss from risk and the work to supervise and help.
Oh, did anyone say, “No harm charging high interest rates, it’s win-win anyway”? Well then, should it be named “microfinance” in the first place?
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