How Evil Capitalists Can Save the World… and Just Might — the micro credit movement:
The essential idea here is that the very poorest, those least well served by the financial system, are precisely those who benefit most from access to capital. The sums are tiny, $50 here, $300 there for a house, and the general agreement is that the system works, works better than anything else that has been tried.
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Borrowers are organized into groups and only a subset of the group can have loans outstanding at any one time. There is therefore considerable pressure from neighbors and such other group members to make sure that the loan is repaid so that the next person can get a loan and start the slow and hard climb out of destitution. It should also be noted that Grameen charges full interest (although without compounding) and that it is profitable. Yes, it’s a non-profit organization but it receives back more than it lends out, the extra being added to reserves to increase future lending.
[...]
Borrowers are organized into groups and only a subset of the group can have loans outstanding at any one time. There is therefore considerable pressure from neighbors and such other group members to make sure that the loan is repaid so that the next person can get a loan and start the slow and hard climb out of destitution. It should also be noted that Grameen charges full interest (although without compounding) and that it is profitable. Yes, it’s a non-profit organization but it receives back more than it lends out, the extra being added to reserves to increase future lending.