Tuesday, April 13, 2010

An end to the end of poverty, again

New York Times:

[Muhammad] Yunus says [microfinance] interest rates should be 10 to 15 percent above the cost of raising the money, with anything beyond a “red zone” of loan sharking. “We need to draw a line between genuine and abuse,” he said. “You will never see the situation of poor people if you look at it through the glasses of profit-making.”

In that case, one option might be to extend loans to poor people through institutions they can control, like their government. When people control something, they needn't rely on the iron law of Muhammad Yunus's recommendations. But because poor people aren't permitted to control their governments, they are invariably robbed by every salvation scheme conceived in the private sector.

1 comment:

JM said...

There's this too:


At least he acknowledged the abuse however.