27/10/08

hierarchy prioritized

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.

How so? What lessons does micro-finance have for Wall Street?
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?

5 comments:

anu said...

>>if all these banks were to disappear, why would any truly marginalized individual in the country miss them?

Hmmm what a question? Someone actually cares that a marginalized individual misses something........ :-) how about we ask if the banks et al will miss the marginalized individual if he disappeared? If all of them took Rapelli Mallaih's way out? Maybe some innovation might happen, our bright engineers may device machines that would do those mean manual work, that the marginalized was doing. The banks would lend happily ...maybe, there will be shining toilets that flush themselves, roads that lay themselves, crops that grow and harvest........ all very loan worthy endeavors if they come attached with innovated technology, from our very own twice born, thousand time blessed, learned innovators. India will truly shine, but alas machine and technology will not substitute that other commodity.........women, the marginalized women. Will have to find ways to disappear the man but keep the women marginalized, well, that is what happens when the banks don't lend and moneylenders ensure that men commit suicide, unprotected marginalized women, a plenty...... I am rambling.. :-) True, the banks are not for the marginalized. Would like to read or get some insight into the parallel or the main institutions -moneylenders,....... if 85% of Indians don't have accounts, and if the large majority are depending on moneylenders, it would be interesting to know, what, who, how..........these operate...

Where I come from they come in so many shape and sizes, the only rule that they followed was how best to collect money, the ones that could employ the nastier creeps to arm twist the borrower was high in hierarchy....

kuffir said...

anu,

very interesting observations.

i said marginalized individuals, not men or women. women constitute the majority of the marginalized.

'if 85% of Indians don't have accounts, and if the large majority are depending on moneylenders, it would be interesting to know, what, who, how..........these operate..'

isn't that the point? our 'indian' banks do not wish to know who these people are, and who do they lend to. and most governments and political parties still insist that they're indian.

anu said...

>>'if 85% of Indians don't have accounts, and if the large majority are depending on moneylenders, it would be interesting to know, what, who, how..........these operate..'

No, Kuffir, not the 85%....I want to know who the moneylenders are? we need to deconstruct that sector. Why does that thrive? banks are for the haves.........for the have-not's it is the moneylenders. Understanding the various forms of moneylending, exposing them and seeking reforms for this, is as significant and maybe more urgent, than hitting the wall that is catering to a mere 15%.

There is little written on this and if at all, from within the establishments......of no use essentially. Though instinctively we all understand 'money lending' as a process, we rarely seem to attack it as a virulent form that effects the poor majority, something that the govt and political parties barely seem to acknowledge, but their blessing on this institution is apparent to everybody.

kuffir said...

- 'want to know who the moneylenders are?'

the moneylenders serve the same objective that the banks were supposed to serve when they were nationalized: lend money to people. the moneylenders continue to exist because the bank do not serve the marginalized in the country.

you want the moneylenders to disappear? ask the banks to lend money to the marginalized.

anu said...

the banks are not lending that is clear...... several posts here highlight that. Money lenders are here for good, cannot disappear them............instead can we get them institutionalized, fix an interest rate, some regulations perhaps, some rules that will not let them take lives so easily?

Large amounts of borrowing happens from relatives, may not take lives but the stigma of not returning is just as bad for the family..... yes, if the banks lend it solves most of these issues........ but...

The idea of money availability from banks or money lenders.... micro finance, is that it lets the marginalized go beyond just survival, where he/she has some scope for innovating a bit, if we are not going to push for reforms from all these types, institutional/non-institutional, the marginalized will continue to be just that......... or worse be dead.

 
Add to Technorati Favorites