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January 18, 2009 | Uncategorized | Comments (0)Hopefully the government bureaucrats and the consumer protectionists won’t find out this “communal pot lending” model exists! If they do, this service will “blow up” due to disclaimers, disclosures, licensing, bonding, auditing… being forced down their throats.
Actually, Muhammad Yunus won a Nobel Peace prize in 2006 for similar work he performed with Grameen Bank in India. He setup small networks of extremely poor Indian women. His bank lends money to the GROUP; each member is responsible for ALL the members.
Results were fantastic! Stories of one poor Indian woman beginning with a $7 loan for a few chickens eventually employing 350 workers on her chicken ranch! Another would gather crushed juice containers to make purses. The GROUP lent her $14 and she built it into a 100 plus employee business!!
Interestingly, when Yunus attempted these “micro-loans” with the men they failed to pay back the loans and the GROUPS disbanded
) This is now referred to as “MicroFinance.” Hmmm… small, uncollateralized Loans… what does that sound like?
Grameen Bank is planning to experiment with these micro-loans in New York as well. We in the payday loan industry are all for this! Let the market determine what products at what fees will be offered. Let’s see what survives in the marketplace.
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