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"Microdebt" clearly does not solve poverty. This idea has always had its critics. It is distasteful at best to be a money lender to the poorest strata of humani
by n00b101 11y ago
"Microdebt" clearly does not solve poverty. This idea has always had its critics. It is distasteful at best to be a money lender to the poorest strata of humanity. Common wisdom tells us as much.
But it is also common wisdom that to "teach a man/woman to fish" is better than to just "give a fish." As an entrepreneur I do believe in the unique ability of entrepreneurship to allow people to raise themselves above and out of their present circumstances.
Perhaps "microequity" financing can succeed where "microdebt" financing has failed? Or maybe "micro-crowdsourcing?" How about a Kickstarter for African basket weavers? Would you pay $5+shipping for a hand made African/Asian/Etc cultural craftwork? Would you pay $50 if you saw the craftperson's story/picture/pitch video/poor family? Crowdsourcing has the benefit of solving serious supply chain and financing failure risks for entrepreneurs, it's basically pre-ordering and building product on the customer's expense. Perhaps the solution is a combination of microdebt, microequity and microcrowdsource?
I don't mean to disparage anyone, but perhaps we could all benefit from some young grads with Silicon Valley startup fever focusing technology and innovation on the poorer parts of the world instead of focusing on delivery-based services in rich "lifestyle bubble" cities.
- zzalpha 11y ago"Microdebt" clearly does not solve poverty. This idea has always had its critics. It is distasteful at best to be a money lender to the poorest strata of humanity. Common wisdom tells us as much. I couldn't care less about your unsupported "common wisdom". Show me data.
- GFK_of_xmaspast 11y agoAre you aware of the difference between an empirical claim and a normative claim?
- mtdewcmu 11y ago>> "Microdebt" clearly does not solve poverty. This idea has always had its critics. It is distasteful at best to be a money lender to the poorest strata of humanity. Common wisdom tells us as much. But payday-loan places have been an absolute gift to the poor here in the US...
- rdlecler1 11y agoYou can use services like Kiva, but the general problem is that it is expensive to pick winners and diligence opportunities. It's hard with debt financing (clearly because people still give out bad loans), even harder with equity financing. Also, equity financing provides no clear way for investors to get their money back. There is far less of an incentive structure here. Only debt creates that obligation which compels people to honor their obligation. The challenge is, is that investors have a lot of places to put their money and an asset class needs to be compelling from a risk-adjusted returns perspective. Usury laws can protect predictors rates, but there are fundamental limits on what constitutes a profitable interest rate because of higher default rates with sub-prime lending.