[p2p-research] The failure of micro-credit?

Samuel Rose samuel.rose at gmail.com
Mon Aug 24 15:29:59 CEST 2009

On Sun, Aug 23, 2009 at 10:28 PM, Michel Bauwens<michelsub2004 at gmail.com> wrote:
> hi Sam,
> I'm puzzled by your 'total' opposition to credit.

Well, I am not "totally" opposed to credit. In fact, if one person
wants to lend another money, my opinion is irrelevant.

However, I do advocate other choices over credit, because the desire
to implement microlending systems was becoming the default go-to
choice for many people trying to implement peer lending systems.

>Even most monetary
> reformers/transformers recognize the difference between turnover credit, and
> investment credit. They usually say the problem is that contemporary money
> conflates them, and that a proper separation is better. In fact, people like
> Thomas Greco advocate, convincingly that a mutual credit clearing system
> would be much superior to the current money system.
> I don't think the bangladeshi women would have access to any pools in the
> first place ...

The same resources that are put towards micro credit could have been
used to create pools.

What if the first woman who got a loan, instead of paying it back,
worked with community people to find the next person who qualified for
a "loan" and sent the payments to her or him instead, with a community
entity tracking that this was happening. Repeat this many times, and
you have a community resource pool (in this case the "pool" is all
money). You don't need a "bank" to mediate this. All you need are a
few micro investments to start it.

>However, they could issue their own currency/credit clearing
> system for their own exchanges, bypassing the need for 'bank's and
> debt-based money.
> I've never seen microfinance as a panacea, but from the documentaries I have
> seen, there is a huge boost in the dignity and collective identity of those
> particpating, at least in the good schemes. Isn't the problem that
> microfinance has become commercial, with outfits such as in mexico now
> asking interest that is even higher than normal banks?

I'd be a lot more comfortable with it if I knew for sure that the
people in Bangladesh, Mexico, etc were at least co-owners of the banks
or finance entities that lent them the money (eg credit unions). This
will keep their loans from becoming products that can be passed around
corporate banking systems. Plus, will keep their money and interest
they are paying back in their own communities. Not that I know for
sure who is behind any of these loans, but it would be nice to know
that localized economies were considered

I am definitely not totally opposed to lending and credit. But, I want
to help people see credit as not always needing to be the first and
only option. But rather one of many alternatives

> Michel

Sam Rose
Social Synergy
Tel:+1(517) 639-1552
Cel: +1-(517)-974-6451
skype: samuelrose
email: samuel.rose at gmail.com

"The universe is not required to be in perfect harmony with human
ambition." - Carl Sagan

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