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Did you read the third and fourth graf of TFA? It appears Mexico gives regular handouts, which still stimulates wise spending. Microcredit was a huge fad a few
by ENOTTY 13y ago
Did you read the third and fourth graf of TFA? It appears Mexico gives regular handouts, which still stimulates wise spending.
Microcredit was a huge fad a few years ago, but then some studies found that its effectiveness may be suspect and requires more study. See http://en.wikipedia.org/wiki/Impact_of_microcredit http://en.wikipedia.org/wiki/Impact_of_microcredit
- capex 13y agoAt an average of 22.3% annual interest rate, microcredit schemes appear to be a ripoff.
- tehwalrus 13y ago20-25% ain't bad when you don't have good ratings data. Look at Wonga et al in the UK - 4000% was the highest one I think. (they're called "payday" loans - they give you up to £1,000 for up to 30 days. Most people who use them end up in a debt spiral, unsurprisingly.)
- RougeFemme 13y agoI have no data to back this up but. . .when we first started hearing about microcredit, the funds were coming from non- or not-for-profits entities. Then banks saw a huge potential there and jumped in. I think it would be interesting to measure the effectiveness of non- and not-for-profits vs. banks and for-profits.