Mr Yunus has got a point.. Recently read an article about SKS lending no longer only for make-a-living activities like buying a rickshaw but also for consumer products like gold and TVs.
This kind or argument is very common, you shouldn't make money of the back of poor people.
However I can't stand that - he who assumes that attitude essentially says "I know what a person whom I have never met and who has a life that is very different from mine wants better than he himselfs does". If you can make money of the poor such that they are in a better position (and that seemed to be the idea behind microlending in the first place) then all the more power to you.
And if you can't, well then it is your money to waste.
Micro-finance only helps people if its done carefully. The MFIs need to have pretty stringent requirements for giving out loans, otherwise they just put people in more debt. The fear is that the IPO will lead to a more profit driven company and therefore to giving loans to people who maybe shouldn't get them and forcing them to pay it back when they can't.
There are instances of pressure put on clients causing things like suicides, which causes problem for micro finance as a whole.
I'm not necessarily against the IPO, but I think your're misunderstanding his argument.
5 comments
[ 2.5 ms ] story [ 23.8 ms ] threadhttp://www.forbes.com/2009/09/25/crossroads-vikram-akula-sks...
However I can't stand that - he who assumes that attitude essentially says "I know what a person whom I have never met and who has a life that is very different from mine wants better than he himselfs does". If you can make money of the poor such that they are in a better position (and that seemed to be the idea behind microlending in the first place) then all the more power to you.
And if you can't, well then it is your money to waste.
Micro-finance only helps people if its done carefully. The MFIs need to have pretty stringent requirements for giving out loans, otherwise they just put people in more debt. The fear is that the IPO will lead to a more profit driven company and therefore to giving loans to people who maybe shouldn't get them and forcing them to pay it back when they can't.
There are instances of pressure put on clients causing things like suicides, which causes problem for micro finance as a whole.
I'm not necessarily against the IPO, but I think your're misunderstanding his argument.