Comments on: SKS, world's largest microfinance service, drives debtors to suicide http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html Brain candy for Happy Mutants Tue, 21 May 2013 19:04:00 +0000 hourly 1 http://wordpress.org/?v=3.4.1 By: CH http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355722 CH Tue, 28 Feb 2012 06:57:00 +0000 http://boingboing.net/?p=145810#comment-1355722 Huh? Well, first of all, Marie Antoinette said no such thing, even though it is commonly attributed to her. And second of all, the original quote is about brioche, which isn't a cake. So, the "explanation" above doesn't sound that plausible. http://en.wikipedia.org/wiki/Let_them_eat_cake Huh? Well, first of all, Marie Antoinette said no such thing, even though it is commonly attributed to her. And second of all, the original quote is about brioche, which isn’t a cake. So, the “explanation” above doesn’t sound that plausible. http://en.wikipedia.org/wiki/Let_them_eat_cake

]]> By: Antinous / Moderator http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355580 Antinous / Moderator Mon, 27 Feb 2012 23:38:00 +0000 http://boingboing.net/?p=145810#comment-1355580 It's India.  Things don't work that way.  A contract is only as good as your ability to pay enforcers. It’s India.  Things don’t work that way.  A contract is only as good as your ability to pay enforcers.

]]> By: ♡ Malcolm Jackson http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355462 ♡ Malcolm Jackson Mon, 27 Feb 2012 21:09:00 +0000 http://boingboing.net/?p=145810#comment-1355462 This is so often the case when microcredit goes wrong. The borrowers are not educated enough by the lender as to what microcredit is for or how it works, there is not enough business consultation support from the lender, the loans are made without a true assessment of the viability of the borrower's business idea, the lender uses debt collectors instead of more of the above and educational business counsellors. Microcredit borrowers in the developing world have a lower debt default ratio than borrowers in the western world. The errors here pretty much lie with the lender and are in many cases traceable back to a lenders suspect motivations for being in the microcredit industry. This is so often the case when microcredit goes wrong. The borrowers are not educated enough by the lender as to what microcredit is for or how it works, there is not enough business consultation support from the lender, the loans are made without a true assessment of the viability of the borrower’s business idea, the lender uses debt collectors instead of more of the above and educational business counsellors.

Microcredit borrowers in the developing world have a lower debt default ratio than borrowers in the western world. The errors here pretty much lie with the lender and are in many cases traceable back to a lenders suspect motivations for being in the microcredit industry.

]]> By: ♡ Malcolm Jackson http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355453 ♡ Malcolm Jackson Mon, 27 Feb 2012 21:01:00 +0000 http://boingboing.net/?p=145810#comment-1355453 The point is they've taken a system built for humanitarian purposes & used it for their own profit while selling it as the same system. It's not.  The point is they’ve taken a system built for humanitarian purposes & used it for their own profit while selling it as the same system. It’s not. 

]]> By: atimoshenko http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355374 atimoshenko Mon, 27 Feb 2012 19:53:00 +0000 http://boingboing.net/?p=145810#comment-1355374 The only thing separating a (genuine) micro-finance operator from a loan shark are the ethics and motivations of the company and its employees. Shame on SKS and Sandstone. The only thing separating a (genuine) micro-finance operator from a loan shark are the ethics and motivations of the company and its employees. Shame on SKS and Sandstone.

]]> By: ♡ Malcolm Jackson http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355368 ♡ Malcolm Jackson Mon, 27 Feb 2012 19:47:00 +0000 http://boingboing.net/?p=145810#comment-1355368 I am so, so sad to read this. Micro finance as developed by Muhammad Yunus has been a fantastic tool for poverty reduction, and as Muhammad Yunus tells it Grameen Bank works compassionately with borrowers who find themselves unable to pay - to do otherwise would nullify the whole point of Micro Finance which is of course to alleviate poverty. It's a system born out of compassion.  Muhammad Yunus is a dear, humble man who created a brilliant system. The system was created precisely to provide a different experience for borrowers than this kind of horror that was unfortunately the norm before the dawn of Micro Finance. I am so so sad to see Muhammad's brilliant idea being misused by greedy bankers who do not know how to put anyone first other than themselves.  SKS you have massively failed here. I suggest you bring in Grameen to reorganize all aspects of your training and entire operation. I am so, so sad to read this. Micro finance as developed by Muhammad Yunus has been a fantastic tool for poverty reduction, and as Muhammad Yunus tells it Grameen Bank works compassionately with borrowers who find themselves unable to pay - to do otherwise would nullify the whole point of Micro Finance which is of course to alleviate poverty. It’s a system born out of compassion.

 Muhammad Yunus is a dear, humble man who created a brilliant system. The system was created precisely to provide a different experience for borrowers than this kind of horror that was unfortunately the norm before the dawn of Micro Finance. I am so so sad to see Muhammad’s brilliant idea being misused by greedy bankers who do not know how to put anyone first other than themselves. 

SKS you have massively failed here. I suggest you bring in Grameen to reorganize all aspects of your training and entire operation.

]]> By: Brian Hansen http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355332 Brian Hansen Mon, 27 Feb 2012 19:21:00 +0000 http://boingboing.net/?p=145810#comment-1355332 The loan would not be taken as simple math can presume that few would be able to fulfill the commitment and consciously theft and bankruptcy fraud is not a viable option. My first comment appears misconstrued, the primary point was that companies would not be placed into predatory collection actions given more education/time was presented during the initial lending commitment.  Further the impact of defaulting borrowers (consumer or businesses), directly impact for any inter-related business partners.   The loan would not be taken as simple math can presume that few would be able to fulfill the commitment and consciously theft and bankruptcy fraud is not a viable option.

My first comment appears misconstrued, the primary point was that companies would not be placed into predatory collection actions given more education/time was presented during the initial lending commitment.  Further the impact of defaulting borrowers (consumer or businesses), directly impact for any inter-related business partners.  

]]> By: TooGoodToCheck http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355174 TooGoodToCheck Mon, 27 Feb 2012 16:17:00 +0000 http://boingboing.net/?p=145810#comment-1355174 I believe that life insurance may be a factor.   I don't have a really good citation for this, but NPR mentions it here: http://www.npr.org/2010/12/31/132497267/indias-poor-reel-under-microfinance-debt-burden  I believe that life insurance may be a factor.   I don’t have a really good citation for this, but NPR mentions it here:
http://www.npr.org/2010/12/31/132497267/indias-poor-reel-under-microfinance-debt-burden 

]]> By: Teller http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355113 Teller Mon, 27 Feb 2012 14:57:00 +0000 http://boingboing.net/?p=145810#comment-1355113 The posted link above states that in death, the debt is forgiven. Your information must come from elsewhere. The posted link above states that in death, the debt is forgiven. Your information must come from elsewhere.

]]> By: journey46 http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1355003 journey46 Mon, 27 Feb 2012 10:39:00 +0000 http://boingboing.net/?p=145810#comment-1355003 it is what marie antoinette's famous quote "let them eat cake" to the french people really meant. it is what marie antoinette’s famous quote “let them eat cake” to the french people really meant.

]]> By: Antinous / Moderator http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354996 Antinous / Moderator Mon, 27 Feb 2012 10:05:00 +0000 http://boingboing.net/?p=145810#comment-1354996 <blockquote>Why would the agents suggest suicide? Dead people don't repay loans.</blockquote>Their children are easily sold into prostitution or used for organs.

Why would the agents suggest suicide? Dead people don’t repay loans.

Their children are easily sold into prostitution or used for organs.

]]> By: Moriarty http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354991 Moriarty Mon, 27 Feb 2012 09:42:00 +0000 http://boingboing.net/?p=145810#comment-1354991  Why would the agents suggest suicide? Dead people don't repay loans.  Why would the agents suggest suicide? Dead people don’t repay loans.

]]> By: digi_owl http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354949 digi_owl Mon, 27 Feb 2012 05:54:00 +0000 http://boingboing.net/?p=145810#comment-1354949 was it Einstein or someone else that said that the greatest problem for man was our inability to grasp exponential functions? was it Einstein or someone else that said that the greatest problem for man was our inability to grasp exponential functions?

]]> By: Marc Mielke http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354941 Marc Mielke Mon, 27 Feb 2012 05:02:00 +0000 http://boingboing.net/?p=145810#comment-1354941 Take it! It's EASY to disappear yourself with that much scratch! Harder with the smaller amounts discussed here. I would not be surprised if this somehow gets blamed on Obama. Didn't his mother invent microloans or something? Take it! It’s EASY to disappear yourself with that much scratch! Harder with the smaller amounts discussed here.

I would not be surprised if this somehow gets blamed on Obama. Didn’t his mother invent microloans or something?

]]> By: blueelm http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354854 blueelm Mon, 27 Feb 2012 02:16:00 +0000 http://boingboing.net/?p=145810#comment-1354854 It is ignorance though, ignorance of how this will progress once they take the loan. Most people who fall into this kind of mess are really unaware of how things can go afterward for them. Remember, ignorance isn't that big a deal until some one exploits it. It is ignorance though, ignorance of how this will progress once they take the loan. Most people who fall into this kind of mess are really unaware of how things can go afterward for them. Remember, ignorance isn’t that big a deal until some one exploits it.

]]> By: SedanChair http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354824 SedanChair Mon, 27 Feb 2012 01:23:00 +0000 http://boingboing.net/?p=145810#comment-1354824 My, what a superior tone. I'd like to see what you'd do if someone offered to loan you $30 million USD. Don't bother answering. The point is you don't know what you'll do until the opportunity presents itself. My, what a superior tone. I’d like to see what you’d do if someone offered to loan you $30 million USD.

Don’t bother answering. The point is you don’t know what you’ll do until the opportunity presents itself.

]]> By: Teller http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354795 Teller Mon, 27 Feb 2012 00:21:00 +0000 http://boingboing.net/?p=145810#comment-1354795 60 Minutes recently ran a piece on how gold is practically a cultural necessity in India. While Americans find gold a luxury, it isn't to Indian families of every stratum. Maybe gold plays a part in this need to borrow. 60 Minutes recently ran a piece on how gold is practically a cultural necessity in India. While Americans find gold a luxury, it isn’t to Indian families of every stratum. Maybe gold plays a part in this need to borrow.

]]> By: bcsizemo http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354783 bcsizemo Sun, 26 Feb 2012 23:58:00 +0000 http://boingboing.net/?p=145810#comment-1354783 "The grease and flour scrapings of cake pans." If that's the brown stuff left over once I flip out the cake, I'm lovin' it.  That's just about the best part of making a cake. “The grease and flour scrapings of cake pans.”

If that’s the brown stuff left over once I flip out the cake, I’m lovin’ it.  That’s just about the best part of making a cake.

]]> By: phisrow http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354746 phisrow Sun, 26 Feb 2012 22:58:00 +0000 http://boingboing.net/?p=145810#comment-1354746 'Commitment' cuts both ways: The borrower agreed to pay the money back. The lender agreed to provide the loan without collateral(assuming the usual microfinance practice) based on the bet that enough of the loans would pay off to make that a profitable line of business. Attempting to turn an unsecured loan into a secured loan by making default impossible, or inciting others to seize the borrower's assets, or similar means, isn't merely 'immoral' it is theft and a violation of their commitment. People are free to offer unsecured credit; but they take on the risk of default by doing so. If you squeeze the defaulter to the point of suicide and they still haven't paid up, it seems pretty likely that they aren't just hiding their assets in a sham bankruptcy of some sort... ‘Commitment’ cuts both ways: The borrower agreed to pay the money back. The lender agreed to provide the loan without collateral(assuming the usual microfinance practice) based on the bet that enough of the loans would pay off to make that a profitable line of business.

Attempting to turn an unsecured loan into a secured loan by making default impossible, or inciting others to seize the borrower’s assets, or similar means, isn’t merely ‘immoral’ it is theft and a violation of their commitment.

People are free to offer unsecured credit; but they take on the risk of default by doing so. If you squeeze the defaulter to the point of suicide and they still haven’t paid up, it seems pretty likely that they aren’t just hiding their assets in a sham bankruptcy of some sort…

]]> By: stephenl123 http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354745 stephenl123 Sun, 26 Feb 2012 22:56:00 +0000 http://boingboing.net/?p=145810#comment-1354745 This story isn't particularly about Microfinance.  That part is misleading.  This same story happens all the time in the US with mortgages, shady loans, credit card debt, etc. This story isn’t particularly about Microfinance.  That part is misleading.  This same story happens all the time in the US with mortgages, shady loans, credit card debt, etc.

]]> By: phisrow http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354742 phisrow Sun, 26 Feb 2012 22:50:00 +0000 http://boingboing.net/?p=145810#comment-1354742 Spoken like a man ignorant of the fine institution of the 'Sponging House'... Spoken like a man ignorant of the fine institution of the ‘Sponging House’…

]]> By: journey46 http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354743 journey46 Sun, 26 Feb 2012 22:50:00 +0000 http://boingboing.net/?p=145810#comment-1354743 The appetizer ? The Constitutional right to spend money to buy elected officials who will insure business and banking are unregulated and fair business practice laws are eliminated. The soup du jour. Bankrupting nations and brow beating 3rd world debtors into suicide. Wait, wait, don't leave, you're gonna love the main course ! Loss of all property and liberty in perpetual servitude. And for dessert ? The grease and flour scrapings of cake pans. The appetizer ?
The Constitutional right to spend money to buy elected officials who will insure business and banking are unregulated and fair business practice laws are eliminated.
The soup du jour.
Bankrupting nations and brow beating 3rd world debtors into suicide.
Wait, wait, don’t leave, you’re gonna love the main course !
Loss of all property and liberty in perpetual servitude.
And for dessert ?
The grease and flour scrapings of cake pans.

]]> By: phisrow http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354741 phisrow Sun, 26 Feb 2012 22:49:00 +0000 http://boingboing.net/?p=145810#comment-1354741 Given the target demographics of the 'microfinance' model(poor, collateral-less borrowers, often possessing some other socially marginalizing characteristics, that the usual lenders won't touch) the bankruptcy laws probably end up not mattering all that much. Unless the local DA equivalent happens to be on a crusade, getting even the most favorable law applied is going to cost more than you can afford... Given the target demographics of the ‘microfinance’ model(poor, collateral-less borrowers, often possessing some other socially marginalizing characteristics, that the usual lenders won’t touch) the bankruptcy laws probably end up not mattering all that much. Unless the local DA equivalent happens to be on a crusade, getting even the most favorable law applied is going to cost more than you can afford…

]]> By: MrEricSir http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354729 MrEricSir Sun, 26 Feb 2012 22:29:00 +0000 http://boingboing.net/?p=145810#comment-1354729 Makes you wonder what the bankruptcy laws are in the countries where microfinance companies operate. Makes you wonder what the bankruptcy laws are in the countries where microfinance companies operate.

]]> By: Brian Hansen http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354722 Brian Hansen Sun, 26 Feb 2012 22:17:00 +0000 http://boingboing.net/?p=145810#comment-1354722 Though the callousness of their practices is immoral, the base cause is the inability for the borrower to fulfill their commitments.  The losses by the borrowing company ultimately drives the cost of their products higher or the cost of interest higher for everyone else.   The education system surrounding credit and personal finance may be the core problem.  However given that rampant credit is the only item running "progress" in business, this is not likely to reach the consumers. Though the callousness of their practices is immoral, the base cause is the inability for the borrower to fulfill their commitments.  The losses by the borrowing company ultimately drives the cost of their products higher or the cost of interest higher for everyone else.  

The education system surrounding credit and personal finance may be the core problem.  However given that rampant credit is the only item running “progress” in business, this is not likely to reach the consumers.

]]> By: Just_Ok http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354708 Just_Ok Sun, 26 Feb 2012 22:01:00 +0000 http://boingboing.net/?p=145810#comment-1354708 they cost too much, no profit in them. they cost too much, no profit in them.

]]> By: phisrow http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354698 phisrow Sun, 26 Feb 2012 21:49:00 +0000 http://boingboing.net/?p=145810#comment-1354698 The studious banality of the various besuited flacks quoted in the article is as impressive as it is alarming. "The growth was very rapid. That growth led to some suboptimal outcomes," ""Mistakes were made, but I find it difficult to believe there was anything people did at a managerial level to encourage field officers to do that,""It must take practice to say things like that with a straight face. Can't make an omelet without killing some people, I suppose... The studious banality of the various besuited flacks quoted in the article is as impressive as it is alarming.

“The growth was very rapid. That growth led to some suboptimal outcomes,” ”"Mistakes were made, but I find it difficult to believe there was anything people did at a managerial level to encourage field officers to do that,”"It must take practice to say things like that with a straight face. Can’t make an omelet without killing some people, I suppose…

]]> By: jtegnell http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354692 jtegnell Sun, 26 Feb 2012 21:44:00 +0000 http://boingboing.net/?p=145810#comment-1354692 Whatever happened to debtor's prisons? That's the way to go. Whatever happened to debtor’s prisons? That’s the way to go.

]]> By: Marco Antonio Morales http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354675 Marco Antonio Morales Sun, 26 Feb 2012 21:20:00 +0000 http://boingboing.net/?p=145810#comment-1354675 You're right. How goddamned irresponsible to suddenly have a need that surpasses your income. Accidents, house plumbing or roofing breaking, a child with medical needs, a broken car which supplies your income... how dare anyone have sudden monetary needs, specially in places where the income is so low, you only live day by day? Ignorants... /sarcasm You’re right. How goddamned irresponsible to suddenly have a need that surpasses your income. Accidents, house plumbing or roofing breaking, a child with medical needs, a broken car which supplies your income… how dare anyone have sudden monetary needs, specially in places where the income is so low, you only live day by day?

Ignorants…

/sarcasm

]]> By: David Yoon http://boingboing.net/2012/02/26/sks-worlds-largest-microfin.html#comment-1354668 David Yoon Sun, 26 Feb 2012 21:12:00 +0000 http://boingboing.net/?p=145810#comment-1354668 Invention of the epoch: debt! Invention of the epoch: debt!

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