will the bank ever lend any money to these three businessmen? so that they can move out of the slum? they've been working there, for the last twenty years, honestly and hard for more hours, every day, than any one in the bank itself. for twenty long years. does the bank trust them?i'd said indians do not qualify. not even when they're prioritized. those who have already invested 5 lakhs to 2 crores in their businesses are also prioritized, so what kind of a chance does a thelawallah stand against them?
lending to the really small guy does not make any business sense? listen to swaminathan aiyar:
This is extraordinary. Big financiers lend against collateral, a back-up if their borrower defaults. But MFIs lend with no collateral at all. Big financiers lend to the most creditworthy corporations. MFIs lend to poor women whom nobody in history considered creditworthy before. Yet, the secured loans to big corporations are bombing, while unsecured loans to poor women are being repaid in full.america and most other western nations have programmes like the sba. india has the priority sector to ensure that loans go only to people who have already exhibited their easy access to self-owned resources and credit. people who would have gained access to further credit anyway, even without their needs being prioritized by the government. seen against the history of small borrowers being more trustworthy than bigger businessmen how does one understand the indian banks' reluctance to lend to them? it means those who'd historically never owned much property do not stand a chance with indian banks. that clearly means lower caste borrowers. i ask again: if all these banks were to disappear, why would any truly marginalized individual in the country miss them?
How so? What lessons does micro-finance have for Wall Street?