[lbo-talk] Unbanked (was dd on microcredit)

joanna 123hop at comcast.net
Tue Oct 17 17:52:28 PDT 2006


Thank you for the clarification. An important distinction and an important point -- about the poor's need for financial services, and the state's role in providing them.

Joanna

Yoshie Furuhashi wrote:


> On 10/17/06, joanna <123hop at comcast.net> wrote:
>
>> Yes, it's very, very expensive to be poor. No humor intended.
>>
>> What rally burns my ass about the microcredit movement is that it
>> supports the very ideology that creates poverty. Theoretically, it turns
>> every individual into a mini capitalist, even if the only worker to be
>> exploited is the self. It also makes a mash of the idea of capital,
>> since it implies that what the microcredit recipients get is "capital."
>>
>> Nothing I have left to say on this subject is printable.
>
>
> Postal savings banks do not necessarily make micro loans, though they
> can, especially if they are designed to serve farmers. They have
> several useful functions: to make financial services -- primarily
> savings accounts backed by an implicit or explicit government
> guarantee and safe, cheap means to handle transfers and remittances --
> accessible to all; to keep savings at home (rather than have savers
> send their savings overseas in search of safe havens); and to pool
> small savings and make them available to the government (by making the
> postal service invest savings into government bonds), so that the
> government can finance its public investment out of domestic savings
> at a low cost. If handled well, it is a macroeconomic institution
> useful to medium-rank developing nations.
>
> What's wrong with the Grameen Bank is not that it makes microcredit
> available to some poor women but that it is a for-profit
> private-sector bank, it is represented as a substitute for what the
> state should do, and it is touted as a panacea for poverty.
>
> The government can and should offer micro loans to people who need them.



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