A Booming Poverty Market

Micro-lending was such a novel concept to help the poor, help themselves. It started with not-for-profit organizations, lending to the poor in developing countries -- lending really small amounts of money to help folks start a small business and give themselves a sustaining chance. And it is still going strong around the world, sustained by not-for-profits -- but these days, the greedy feeding frenzy of for-profit business is taking over. The thing about lending to the poor is that most often, they are honourable, trusting people. Getting a loan establishes them in the group on their way out of the hovel, and they would do anything to not default on that status -- anything, including not going into personal bankruptcy. The poor also tend to be uneducated and unaccustomed to the sophistication of modern banking. They care only about how much they regular payment needs to be, and how long they need to make them. They are ripe and ready to be plucked. Easy pickings for those that know better. For-profits know better, and so they taken advantage of the poor, putting them on the slippery slope of 100% APR, with interest rates charged against the full amount of the load, even if the principle is lowered by repayments.

Evil. Absolutely evil! BusinessWeek is carrying an article on for-profits that target the poor in Mexico, and are doing more harm than good. That is what happens when a business caters to its shareholders, and only its shareholders, with no care for the society it serves. Totally pisses me off.