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[...] the people that receive these loans probably don't know what microfinance loans are; that's to say they probably just call them loans. And this is the cr

[...] the people that receive these loans probably don't know what microfinance loans are; that's to say they probably just call them loans. And this is the crux of the issue. The table only denotes what the borrower took the loan for, and not for what actual use the money was put to. Basically it boils down to this: once the money is in their hands, unless the borrowers have had some information dissemination of a substantial sort, it can be used for any purpose. It is typically the lending party's duty to take solid steps towards educating the borrower as to the actual purpose of the loans, and MFIs in India (IMHO) were initially doing a stellar job of this (ok, well, SKS at least - I sat in on some of their 'group training seminars'). I'm not close to the domain now for about a year though, so I couldn't comment for sure any more. As an aside: (I don't think they'll take action against me for saying good things about them, so I'll go right ahead) SKS' impairment levels were so ridiculously low that I would end up manually re-calculating the figures to ensure Mondrian wasn't lying to me or our software wasn't badly broken. As another aside: there is also an emerging trend of 'micro-insurance' products (livestock insurance, crop insurance, 'hut' insurance, etc.) being offered by MFIs as well as large insurance companies which I did a field study on, which reached conclusions similar to what I learned from the SKS project - the illiterate and poor initially cannot even conceive that someone would want to help them out without shafting them, but with substantial education to a few key influential and smart members of the community, the message can be gotten across.

edge17 16y ago
The table only denotes what the borrower took the loan for, and not for what actual use the money was put to. Basically it boils down to this: once the money is in their hands, unless the borrowers have had some information dissemination of a substantial sort, it can be used for any purpose. I don't think (and I could be totally wrong, I don't know the process of actually getting one of these loans) that the left column denotes what the borrower took the loan for. I think it's what the loan was actually used for. The data collectors, I believe, sampled some subgroup of people and asked what the loan was spent on.

edge17 16y ago

The table only denotes what the borrower took the loan for, and not for what actual use the money was put to. Basically it boils down to this: once the money is in their hands, unless the borrowers have had some information dissemination of a substantial sort, it can be used for any purpose. I don't think (and I could be totally wrong, I don't know the process of actually getting one of these loans) that the left column denotes what the borrower took the loan for. I think it's what the loan was actually used for. The data collectors, I believe, sampled some subgroup of people and asked what the loan was spent on.