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>micro-loans will drain resources out of the community That is so not how capitalism works. Money is a means to induce labor. Right now there is a lot of huma
by SimpleXYZ 12y ago
>micro-loans will drain resources out of the community
That is so not how capitalism works. Money is a means to induce labor. Right now there is a lot of human capital in developing countries that is wasted because there is no financial capital to fuel it. Imagine a young person willing to labor 18 hours a day building widgets. Instead he just sits around because he can't find a job building widgets (or afford the materials to buy the raw materials.)
- cornholio 12y agoThe key phrase you leave out is "and leave very little actual productive capital behind". People does not equal human capital, you need educated and experienced people. The only way the borrowers can repay the USD principal + interest back to the external financiers is to participate in world trade, to export or at least substitute the import of widgets from industrialized nations. Will a micro-loan create the conditions for such competitive production ? Hard to imagine.