Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-3

[Chan Mahanta]

Title: Re: [Assam] Fwd: [WaterWatch] Death by Micro
Credit-3


>C'da - I am surprised. Even you would agree that an average
rate charged by these lenders is 390% (let alone the 800% max).

*** I do :-)? HMM, maybe I ought to get into to the loan-sharking
bidness.



>No one is asking that private money lending be abolished -
just that they have >the mooring right. Supernormal profits by any
standards or excuses are just >rank bad for the society.

*** You keep missing the obvious Ram. The mainline lending
institutions; banks, savings and loans, or credit unions won't lend
you $ 200 for week or two weeks.
That is why Pay-day, or Check-cashers are there. They would. At
400%, for two weeks the interest would be $ 37.00. Now if the borrower
can pay back the amount
in say eight weeks, it won't  send her to the poor-house.
Here it is a much needed service, albeit at a high cost. And if such a
short term loan won't work,
and she has no other source to tap, then it does become a serious
burden , unbecoming for an affluent society like America to have to
approve of or accept. It then becomes a case for social services to
move in, or if that does not work, for seeking shelter thru
bankruptcy.

But it still does not mean losing one's home ( or land) or
getting beaten up  or having to take rat poison to end one's
life.

While I understand and applaud your care for the American poor,
your attempt to equate it to what Indian Govt's. abdication of its
responsibilities is doing to farmers at Vidarbha and Andhra--the very
land of Chandrababu Naidu's booming state, does not fly Ram :-).

c-da 








At 2:30 PM -0500 9/29/06, Ram Sarangapani wrote:
C'da
>Payday loans, as predatory as they
are, also are something that many >poor people depend on to deal
with sudden needs of cash, or between two >paychecks, in
emergencies.
 
That is obvious - the Govt. can't help
them so they go to the private sector.
 
>As long as it does not become an
ongoing burden
 
Which it most often does - because of the
excessvily high rates. Very few of the poor really get out of that
cycle - paycheck-moneylender-paycheck.
 
>And it is for this reason Congress
would not outlaw it. In fact the poor >themselves resist abolishing
it.
 
C'da - I am surprised. Even you would
agree that an average rate charged by these lenders is 390% (let alone
the 800% max). No one is asking that private money lending be
abolished - just that they have the mooring right. Supernormal profits
by any standards or excuses are just rank bad for the
society.
 
BTW the Congress doesn't want to outlaw
it because remember "let the markets decide" is the
centerpiece of many of this country's policies.
 
--Ram

 
On 9/29/06, Chan Mahanta <[EMAIL PROTECTED]>
wrote:

--and worst part is, the military
personnel were the main targets. Now with the new law/bill,
only millitary personnel will only pay a max of 36% (a real
giveaway rate if you ask me), while the rest of the poor may as
well go to India and borrow at lower rates (comparitively).

 


>If you read this report, India looks
almost saintly.

 

 
*** There is yet another nuance that you miss
Ram.

 
Payday loans, as predatory as they are, also are something
that many poor people
depend on to deal with sudden needs of cash, or between
two paychecks, in emergencies. As long as it does not become an
ongoing burden, it is a lifesaver. And it is for this reason Congress
would not outlaw it. In fact the poor themselves resist abolishing
it.


 

 

 


 
At 1:30 PM -0500 9/29/06, Ram Sarangapani wrote:

I don't
know why writers always give interest rate charged as just 20% when in
GOI report on Vidharba gave the figure to be as high as 5% per month
to even 1.5% per day. World Bank report of 2003 ( Report No.
25797-IN) also state that interest rate charged from farmers and
SME is 36% to 120% per year.




C'da,

 

Obviously this is predatory lending and the poor are
getting hurt (badly). I just wanted to forward this other piece from
the AP. Now, this news report in no way belittles the World Bank
2003 report on Micro Credit (or India) - but it might do the WB
some good to also read this AP report too.

 

BTW the AP report is NOT talking about rural India, but
the good 'ole USA.

 

The WB says in India the rates are "36% to 120% per year."

The "Kabulis" in
the US call themselves payday lenders. These guys were charging up
to 800% - until our able Congress came in and said its got to
be 36%. Which, I suppose is a great deal (compared to 800)

--and worst part is, the military
personnel were the main targets. Now with the new law/bill,
only millitary personnel will only pay a max of 36% (a real
giveaway rate if you ask me), while the rest of the poor may as
well go to India and borrow at lower rates (comparitively).

 

If you read this report, India looks
almost saintly. I know

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-3

[Ram Sarangapani]

C'da

>Payday loans, as predatory as they are, also are something that many >poor people depend on to deal with sudden needs of cash, or between two >paychecks, in emergencies.
 
That is obvious - the Govt. can't help them so they go to the private sector.
 
>As long as it does not become an ongoing burden
 
Which it most often does - because of the excessvily high rates. Very few of the poor really get out of that cycle - paycheck-moneylender-paycheck. 
 
>And it is for this reason Congress would not outlaw it. In fact the poor >themselves resist abolishing it.
 
C'da - I am surprised. Even you would agree that an average rate charged by these lenders is 390% (let alone the 800% max). No one is asking that private money lending be abolished - just that they have the mooring right. Supernormal profits by any standards or excuses are just rank bad for the society.

 
BTW the Congress doesn't want to outlaw it because remember "let the markets decide" is the centerpiece of many of this country's policies. 
 --Ram 
On 9/29/06, Chan Mahanta <[EMAIL PROTECTED]> wrote:


--and worst part is, the military personnel were the main targets. Now with the new law/bill, only millitary personnel will only pay a max of 36% (a real giveaway rate if you ask me), while the
 rest of the poor may as well go to India and borrow at lower rates (comparitively).
 
>If you read this report, India looks almost saintly.
 
 
*** There is yet another nuance that you miss Ram.
 
Payday loans, as predatory as they are, also are something that many poor people
depend on to deal with sudden needs of cash, or between two paychecks, in emergencies. As long as it does not become an ongoing burden, it is a lifesaver. And it is for this reason Congress would not outlaw it. In fact the poor themselves resist abolishing it.

 
 
 
 


At 1:30 PM -0500 9/29/06, Ram Sarangapani wrote:

I don't know why writers always give interest rate charged as just 20% when in GOI report on Vidharba gave the figure to be as high as 5% per month to even 1.5% per day. World Bank report of 2003 (
 Report No. 25797-IN) also state that interest rate charged from farmers and SME is 36% to 120% per year.
C'da,
 
Obviously this is predatory lending and the poor are getting hurt (badly). I just wanted to forward this other piece from the AP. Now, this news report in no way belittles the World Bank 2003 report on Micro Credit (or India) - but it might do the WB some good to also read this AP report too.

 
BTW the AP report is NOT talking about rural India, but the good 'ole USA.
 
The WB says in India the rates are "36% to 120% per year."
The "Kabulis" in the US call themselves payday lenders. These guys were charging up to 800% - until our able Congress came in and said its got to be 36%. Which, I suppose is a great deal (compared to 800)

--and worst part is, the military personnel were the main targets. Now with the new law/bill, only millitary personnel will only pay a max of 36% (a real giveaway rate if you ask me), while the
 rest of the poor may as well go to India and borrow at lower rates (comparitively).
 
If you read this report, India looks almost saintly. I know you keep saying that all this is about the broken system in India. Now, we all know, unlike India (which is rife with mal-governance, corruption etc), the US is much better governed, a great demokrasy and the system ain't broken.

How do you explain this in a well-oiled, functioning country like the US?
Here is the AP report - highlights mine.
 
--Ram
__
Lawmakers to limit military loan rates
By Sam Hananel, Associated Press Writer | September 29, 2006
WASHINGTON --Interest rates on payday loans to military service members would be limited under an agreement reached Friday between House and Senate Republicans.

The measure imposing a 36 percent cap on the annual interest rate for payday loans to service members or their spouses will be included in the defense authorization bill, which Congress was expected to approve later Friday.

"We need to enact these new protections for our troops and their families because a growing predatory lending problem has impacted our operational readiness," said Sen. Jim Talent, R-Mo., who pushed the measure in the Senate.

Talent and other lawmakers charged that payday lenders target military personnel, offering quick cash advances at outrageously high interest rates that trap unsavvy borrowers in a cycle of debt.

Payday lenders offer short-term loans against borrowers' paychecks and charge fees. Borrowers that cannot repay the loan by the next payday often "roll over" the loan repeatedly, leading to more charges.

The average annual percentage rate for payday loans is about 390 percent, and as lending fees add up, borrowers can end up paying an annual percentage rate of 800 percent or more
 .
The Defense Department strongly supported the rate cap measure after issuing a report earlier this year finding many payday lenders are clustere

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-3

[Chan Mahanta]

Title: Re: [Assam] Fwd: [WaterWatch] Death by Micro
Credit-3


--and worst part is,
the military personnel were the main targets. Now with the new
law/bill, only millitary personnel will only pay a max of 36%
(a real giveaway rate if you ask me), while the rest of the
poor may as well go to India and borrow at lower rates
(comparitively).
 
>If you read this report, India looks almost
saintly.


*** There is yet another nuance that you miss Ram.

Payday loans, as predatory as they are, also are something that
many poor people
depend on to deal with sudden needs of cash, or between two
paychecks, in emergencies. As long as it does not become an ongoing
burden, it is a lifesaver. And it is for this reason Congress would
not outlaw it. In fact the poor themselves resist abolishing it.












At 1:30 PM -0500 9/29/06, Ram Sarangapani wrote:

I don't
know why writers always give interest rate charged as just 20% when in
GOI report on Vidharba gave the figure to be as high as 5% per month
to even 1.5% per day. World Bank report of 2003 ( Report No.
25797-IN) also state that interest rate charged from farmers and
SME is 36% to 120% per year.


C'da,
 
Obviously this is predatory lending and
the poor are getting hurt (badly). I just wanted to forward this other
piece from the AP. Now, this news report in no way belittles the
World Bank 2003 report on Micro Credit (or India) - but it might
do the WB some good to also read this AP report too.
 
BTW the AP report is NOT talking about
rural India, but the good 'ole USA.
 
The WB says in India the rates are
"36% to 120% per
year."
The
"Kabulis" in the US call themselves payday lenders. These
guys were charging up to 800% - until our able Congress came in
and said its got to be 36%. Which, I suppose is a great deal (compared
to 800)
--and worst part is,
the military personnel were the main targets. Now with the new
law/bill, only millitary personnel will only pay a max of 36%
(a real giveaway rate if you ask me), while the rest of the
poor may as well go to India and borrow at lower rates
(comparitively).
 
If you read this report,
India looks almost saintly. I know you keep saying that all this is
about the broken system in India. Now, we all know, unlike India
(which is rife with mal-governance, corruption etc), the US is much
better governed, a great demokrasy and the system ain't
broken.
How do you explain this
in a well-oiled, functioning country like the US?
Here is the AP report -
highlights mine.
 
--Ram
__

Lawmakers to limit military loan
rates

By Sam Hananel,
Associated Press Writer | September 29, 2006

WASHINGTON
--Interest rates on payday loans to military service members would be
limited under an agreement reached Friday between House and Senate
Republicans.

The measure
imposing a 36 percent cap on the
annual interest rate for payday loans to service members or their
spouses will be included in the defense authorization bill, which
Congress was expected to approve later Friday.

"We need to
enact these new protections for our troops and their families because
a growing predatory lending problem has impacted our operational
readiness," said Sen. Jim Talent, R-Mo., who pushed the measure
in the Senate.

Talent and other
lawmakers charged that payday lenders target military personnel,
offering quick cash advances at outrageously high interest rates that
trap unsavvy borrowers in a cycle of debt.

Payday lenders
offer short-term loans against borrowers' paychecks and charge
fees. Borrowers that cannot repay the
loan by the next payday often "roll over" the loan
repeatedly, leading to more charges.

The average
annual percentage rate for payday loans is about 390 percent, and as
lending fees add up, borrowers can end up paying an annual percentage
rate of 800 percent or more
.

The Defense
Department strongly supported the rate cap measure after issuing a
report earlier this year finding many payday lenders are clustered
around military bases.

Industry officials
say payday loans provide financial assistance to soldiers in need and
claim military personnel will be forced to seek high-cost loans from
unregulated Internet lenders.

Pentagon officials
said the problem was becoming an issue of military readiness, with
spiraling debt causing service members to lose security clearances or
become distracted from their missions.

Consumer protection
advocates, who have long criticized payday lenders for preying on poor
communities, also backed the measure.

"It's important for this to be in
federal law because it will provide a base line of protection
regardless of where you're stationed and regardless of what form of
loan you're getting," said Jean Ann Fox, director of consumer
protection for Consumer Federation of America.

The bill number is H.R. 5122.



 
On 9/28/06, Chan Mahanta <[EMAIL PROTECTED]>
wrote:

X-IronPort-AV: i=&q

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[Chan Mahanta]

Title: Re: [Assam] Fwd: [WaterWatch] Death by Micro
Credit-2


Point well made Ram.

But the difference that you miss, like Umesh does, and I am sure
other fine Indians do too, is that in spite of the usurious and
predatory Pay-day loan type sharks, Americans do have a safety net
that prevents Vidarbha like suicides of the victims. Here we have
BANKRUPTCY protection. And protection against threats, intimidation
and harassment as used to be in Mafia and other such mob ruled times,
associated with predatory lenders. Bankruptcy no doubt is a drastic
move and has long term negative consequences. But it sure beats having
to lose ones sole means of survival--one's land, or one's house, or
one's life.

The other major difference is these Micro-credits approved and
promoted by the desi Govts., WITHOUT any regulatory oversight, or if
there is, only in the books, like everything else in India; are touted
to aid economic development of the rural poor. But what is actually
happening is that the dysfunctional govts'. letting private
loan-sharks do their thing on the poor in the name of economic
liberalization is actually an abject abdication of its own duties and
responsibilities. Just like it is attempting to do for privatization
of drinking water supplies, in building and operating roads,bridges
and sanitation systems, and in all the other areas of its duties in
delegating its job to NGOs.

If private profiteers and NGOs are doing the Govt's job, would
you not want to know what the govt. is there for to begin with?

c-da







At 1:30 PM -0500 9/29/06, Ram Sarangapani wrote:

I don't
know why writers always give interest rate charged as just 20% when in
GOI report on Vidharba gave the figure to be as high as 5% per month
to even 1.5% per day. World Bank report of 2003 ( Report No.
25797-IN) also state that interest rate charged from farmers and
SME is 36% to 120% per year.


C'da,
 
Obviously this is predatory lending and
the poor are getting hurt (badly). I just wanted to forward this other
piece from the AP. Now, this news report in no way belittles the
World Bank 2003 report on Micro Credit (or India) - but it might
do the WB some good to also read this AP report too.
 
BTW the AP report is NOT talking about
rural India, but the good 'ole USA.
 
The WB says in India the rates are
"36% to 120% per
year."
The
"Kabulis" in the US call themselves payday lenders. These
guys were charging up to 800% - until our able Congress came in
and said its got to be 36%. Which, I suppose is a great deal (compared
to 800)
--and worst part is,
the military personnel were the main targets. Now with the new
law/bill, only millitary personnel will only pay a max of 36%
(a real giveaway rate if you ask me), while the rest of the
poor may as well go to India and borrow at lower rates
(comparitively).
 
If you read this report,
India looks almost saintly. I know you keep saying that all this is
about the broken system in India. Now, we all know, unlike India
(which is rife with mal-governance, corruption etc), the US is much
better governed, a great demokrasy and the system ain't
broken.
How do you explain this
in a well-oiled, functioning country like the US?
Here is the AP report -
highlights mine.
 
--Ram
__

Lawmakers to limit military loan
rates

By Sam Hananel,
Associated Press Writer | September 29, 2006

WASHINGTON
--Interest rates on payday loans to military service members would be
limited under an agreement reached Friday between House and Senate
Republicans.

The measure
imposing a 36 percent cap on the
annual interest rate for payday loans to service members or their
spouses will be included in the defense authorization bill, which
Congress was expected to approve later Friday.

"We need to
enact these new protections for our troops and their families because
a growing predatory lending problem has impacted our operational
readiness," said Sen. Jim Talent, R-Mo., who pushed the measure
in the Senate.

Talent and other
lawmakers charged that payday lenders target military personnel,
offering quick cash advances at outrageously high interest rates that
trap unsavvy borrowers in a cycle of debt.

Payday lenders
offer short-term loans against borrowers' paychecks and charge
fees. Borrowers that cannot repay the
loan by the next payday often "roll over" the loan
repeatedly, leading to more charges.

The average
annual percentage rate for payday loans is about 390 percent, and as
lending fees add up, borrowers can end up paying an annual percentage
rate of 800 percent or more
.

The Defense
Department strongly supported the rate cap measure after issuing a
report earlier this year finding many payday lenders are clustered
around military bases.

Industry officials
say payday loans provide financial assistance to soldiers in need and
claim military personnel will be forced to seek high-cost loans from
u

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[umesh sharma]

Defense personnel know only about life skills at the country's border and so get cheated easily -like gullible villagers--but I never expected this of US army (though even US defense chiefs are worried that literacy rate is so low that new entrants cannot even understand properly the sophisticated mechanisms written on the latest weaponry).     ***  The average annual percentage rate for payday loans is about 390 percent, and as lending fees add up, borrowers can end up paying an annual percentage rate of 800 percent or more .     Good God!!! 800% -and you blame only traditional moneylenders -as bloodsucking Shylocks!     UmeshRam Sarangapani <[EMAIL PROTECTED]> wrote:   
 I don't know why writers always give interest rate charged as just 20% when in GOI report on Vidharba gave the figure to be as high as 5% per month to even 1.5% per day. World Bank report of 2003 ( Report No. 25797-IN) also state that interest rate charged from farmers and SME is 36% to 120% per year.  C'da,     Obviously this is predatory lending and the poor are getting hurt (badly). I just wanted to forward this other piece from the AP. Now, this news report in no way belittles the World Bank 2003 report on Micro Credit (or India) - but it might do the WB some good to also read this AP report too.      BTW the AP report is NOT talking about rural India, but the good 'ole USA.     The WB says in India the rates are "36% to 120% per year."  The "Kabulis" in the US call themselves payday lenders. These guys were charging up to 800% - until our able Congress came in and said its got to be 36%. Which, I suppose is a great deal (compared to 800)   --and worst part is, the military personnel were the main targets. Now with the new law/bill, only millitary personnel will only pay a max of 36% (a real giveaway rate if you ask me), while the rest of the poor may as well go to India and borrow at lower rates (comparitively).     If you read this report, India looks almost saintly. I know you keep saying that all this is about the broken system in India. Now, we all know, unlike India (which is rife with mal-governance, corruption etc), the US is much better governed, a great demokrasy and the system ain't
 broken.   How do you explain this in a well-oiled, functioning country like the US?  Here is the AP report - highlights mine.     --Ram  __Lawmakers to limit military loan rates  By Sam Hananel, Associated Press Writer | September 29, 2006  WASHINGTON --Interest rates on payday loans to military service members would be limited under an agreement reached Friday between House and Senate Republicans.  The measure imposing a 36 percent cap on the annual interest rate for payday loans to service members or their spouses will be included in the defense authorization bill, which Congress was
 expected to approve later Friday.   "We need to enact these new protections for our troops and their families because a growing predatory lending problem has impacted our operational readiness," said Sen. Jim Talent, R-Mo., who pushed the measure in the Senate.   Talent and other lawmakers charged that payday lenders target military personnel, offering quick cash advances at outrageously high interest rates that trap unsavvy borrowers in a cycle of debt.   Payday lenders offer short-term loans against borrowers' paychecks and charge fees. Borrowers that cannot repay the loan by the next payday often "roll over" the loan repeatedly, leading to more charges.   The average annual percentage rate for payday loans is about 390 percent, and as lending fees
 add up, borrowers can end up paying an annual percentage rate of 800 percent or more .  The Defense Department strongly supported the rate cap measure after issuing a report earlier this year finding many payday lenders are clustered around military bases.  Industry officials say payday loans provide financial assistance to soldiers in need and claim military personnel will be forced to seek high-cost loans from unregulated Internet lenders.  Pentagon officials said the problem was becoming an issue of military readiness, with spiraling debt causing service members to lose security clearances or become distracted from their missions.   Consumer protection advocates, who have long criticized payday lenders for preying on poor communities, also backed the measure.  "It's important for this to
 be in federal law because it will provide a base line of protection regardless of where you're stationed and regardless of what form of loan you're getting," said Jean Ann Fox, director of consumer protection for Consumer Federation of America.   The bill number is H.R. 5122.    On 9/28/06, Chan Mahanta <[EMAIL PROTECTED]> wrote:   X-IronPort-AV: i="4.09,228,1157342400";   d="scan'208,217"; a="754206560:sNHT77339836"Comment: DomainKeys? See http://antispam.yahoo.com/domainkeysX-Yahoo-Newman-Property: groups-emailX-Yahoo-Newman-Id: 9542609-m4976X-Apparently-To: [EMAIL PROTECTED]To: [EMAIL

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[Ram Sarangapani]

I don't know why writers always give interest rate charged as just 20% when in GOI report on Vidharba gave the figure to be as high as 5% per month to even 1.5% per day. World Bank report of 2003 (
Report No. 25797-IN) also state that interest rate charged from farmers and SME is 36% to 120% per year.
C'da,
 
Obviously this is predatory lending and the poor are getting hurt (badly). I just wanted to forward this other piece from the AP. Now, this news report in no way belittles the World Bank 2003 report on Micro Credit (or India) - but it might do the WB some good to also read this AP report too. 

 
BTW the AP report is NOT talking about rural India, but the good 'ole USA.
 
The WB says in India the rates are "36% to 120% per year."
The "Kabulis" in the US call themselves payday lenders. These guys were charging up to 800% - until our able Congress came in and said its got to be 36%. Which, I suppose is a great deal (compared to 800)

--and worst part is, the military personnel were the main targets. Now with the new law/bill, only millitary personnel will only pay a max of 36% (a real giveaway rate if you ask me), while the 
rest of the poor may as well go to India and borrow at lower rates (comparitively).
 
If you read this report, India looks almost saintly. I know you keep saying that all this is about the broken system in India. Now, we all know, unlike India (which is rife with mal-governance, corruption etc), the US is much better governed, a great demokrasy and the system ain't broken.

How do you explain this in a well-oiled, functioning country like the US?
Here is the AP report - highlights mine.
 
--Ram
__

Lawmakers to limit military loan rates
By Sam Hananel, Associated Press Writer | September 29, 2006
WASHINGTON --Interest rates on payday loans to military service members would be limited under an agreement reached Friday between House and Senate Republicans.
The measure imposing a 36 percent cap on the annual interest rate for payday loans to service members or their spouses will be included in the defense authorization bill, which Congress was expected to approve later Friday.

"We need to enact these new protections for our troops and their families because a growing predatory lending problem has impacted our operational readiness," said Sen. Jim Talent, R-Mo., who pushed the measure in the Senate.

Talent and other lawmakers charged that payday lenders target military personnel, offering quick cash advances at outrageously high interest rates that trap unsavvy borrowers in a cycle of debt.

Payday lenders offer short-term loans against borrowers' paychecks and charge fees. Borrowers that cannot repay the loan by the next payday often "roll over" the loan repeatedly, leading to more charges.

The average annual percentage rate for payday loans is about 390 percent, and as lending fees add up, borrowers can end up paying an annual percentage rate of 800 percent or more
.
The Defense Department strongly supported the rate cap measure after issuing a report earlier this year finding many payday lenders are clustered around military bases.
Industry officials say payday loans provide financial assistance to soldiers in need and claim military personnel will be forced to seek high-cost loans from unregulated Internet lenders.

Pentagon officials said the problem was becoming an issue of military readiness, with spiraling debt causing service members to lose security clearances or become distracted from their missions.

Consumer protection advocates, who have long criticized payday lenders for preying on poor communities, also backed the measure.
"It's important for this to be in federal law because it will provide a base line of protection regardless of where you're stationed and regardless of what form of loan you're getting," said Jean Ann Fox, director of consumer protection for Consumer Federation of America.

The bill number is H.R. 5122.  
On 9/28/06, Chan Mahanta <[EMAIL PROTECTED]> wrote:


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Death by 

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[Chan Mahanta]

Umesh:

You are so very perceptive. I almost missed the 
lesson. Thanks for pointing it out. Come to think 
of it, there are other reasons to bolster your 
observation:

*** Why should micro-credit be blamed? The farmers are not FORCED
to borrow at 20% interest rates. If they 
do, it is their own damn fault.
Dilip pointed that out too, even though in not so many words.

*** Nobody promised these dumb farmers a rose-garden along with
the sunshine. Who said life is fair? There will always be winners
and losers in life's lotteries. So a few stupid farmers borrow too
much and end up killing themselves, but a whole lot of money-lenders
laugh all the way to the bank too. And they are the nation-builders,
the building blocks of a resurgent India, aren't they? Aren't these
the people we love to point out to stupid Oxomiyas  to emulate?

*** So what a few idiotic farmers go kill themselves after not being
able to pay for their TVs and Motorbikes and refrigerators? India
is far too resilient to be daunted by the loss of a handful of
worthless people. Jut like Mumbai, India won't mope and brood over
the deaths of a few.

If I think hard enough I may be able to find some more reasons to back up your
analysis Umesh. But this is all I have to offer 
for now. Perhaps you can add a few more bits of 
wise observations yourself.

Take care.

c-da






At 10:32 PM +0100 9/28/06, umesh sharma wrote:
>C-da,
>
>Good article but if we draw the moral that
>micro-credit is bad becos it is not effectively
>implemented and people are dying becos of its faults
>--so stop it --then the same logic can work for
>stopping road travel and sea travel etc --becos people
>do die in traffic and travel accidents.
>
>Umesh
>
>>  >
>>  >Death by Micro Credit-2
>>  >
>>  >
>>  >I don’t know why writers always give interest
>>  >rate charged as just 20% when in GOI report on
>>  >Vidharba gave the figure to be as high as 5% per
>>  >month to even 1.5% per day. World Bank report of
>>  >2003 (Report No. 25797-IN) also state that
>>  >interest rate charged from farmers and SME is
>>  >36% to 120% per year.
>>  >
>>  >Access to Rural Credit – Page 108! of WB- 25797- IN
>>  >
>>  >[3 .8 1 India has a wide network of rural
>>  >finance institutions (RFIs), but a large number
>>  >of the rural poor remain under-served or
>>  >completely left out of the formal financial
>>  >system. There are over 30,000 commercial bank
>>  >branches, over 14,000 regional rural banks
>>  >(RRBs), and over 100,000 rural credit
>>  >cooperatives (RCCs) in addition to several
>>  >non-bank financial institutions. This translates
>>  >to about 4,700 people served by each RFI outlet.
>>  >However, the last available rural household
>>  >survey (Reserve Bank of India 1991) found that
>>  >only about one-sixth of rural households
>>  >borrowed from formal RFIs. Non-institutional
>>  >sources accounted for as high as 52-62% of
>>  >household outstanding debt. The rural non-farm
>>  >sector also faces constraints to accessing
>>  >finance. A recent study covering some 20 million
>>  >small-scale rural enterprises (in the
>>  >unorganized sector) found that commercial banks
>>  >reportedly meet merely 4% of the credit needs of
>>  >this sector, and micro-finance sources provide
>>  >another 3% of their credit needs.
>>  >Various estimates suggest that India’s rural
>>  >poor rely almost entirely on informal sources
>>  >(money lenders, traders, commission agents,
>>  >etc.) to meet their consumption credit needs, at
>>  >annual interest rates ranging from 36% to 120%
>>  >per annum.]
>>  >
>>  >My uncle told me the standard procedure in
>>  >Ludhiana, Punjab is moneylenders give a loan !
>>  >of say Rs.1,00,000/- on stamp paper. Actual
>>  >money released is 85% or Rs. 85,000/- and the
>>  >loan is payable at Rs.1000 per day or 1% per day
>>  >from day one.
>>  >
>>  >Compounding of 15% alone comes to 66% annually
>>  >but again Rs.1000/- returned per day lend at
>>  >same rate shall also fetch similar return
>  > >therefore actual interest rate may come close to
>>  >100%.
>>  >
>>  >Supply of spurious seeds, pesticides and
>>  >fertilizers, very low MSP and takeover of farm
>>  >produce by moneylenders at harvest time when
>>  >prices are at it lowest compounded with draught
>>  >or unseasonal rain destroying crops, lack of!
>>  >public healthcare all at add up to the financial
>>  >burden.
>>  >
>>  >Farmers are forced to sell their land to pay for
>>  >treatment of their family members or to get them
>>  >admissions to schools and colleges in
>>  >mushrooming private hospitals and educational
>>  >institutions.
>>  >
>>  >Ravinder Singh
>>  >September28, 2006
>>
>>[EMAIL PROTECTED],
>>
>>  >>  >  hoo.com>[EMAIL PROTECTED]
>>  >
>>  >From: sudhirendar
>>
>><

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[mc mahant]

<people are dying becos of its faults--so stop it --then the same logic can work forstopping road travel and sea travel etc --becos peopledo die in traffic and travel accidents>
As I said "Umesh ,Grow Up - and Fast!"
mm




From:  umesh sharma <[EMAIL PROTECTED]>Reply-To:  [EMAIL PROTECTED]To:  Chan Mahanta <[EMAIL PROTECTED]>, assam@assamnet.orgSubject:  Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2Date:  Thu, 28 Sep 2006 22:32:36 +0100 (BST)>C-da,>>Good article but if we draw the moral that>micro-credit is bad becos it is not effectively>implemented and people are dying becos of its faults>--so stop it --then the same logic can work for>stopping road travel and sea travel etc --becos people>do die in traffic and travel accidents.>>Umesh>> > >> > >Death by Micro Credit-2> > >> > >> > >I don’t know why writers always 
give interest> > >rate charged as just 20% when in GOI report on> > >Vidharba gave the figure to be as high as 5% per> > >month to even 1.5% per day. World Bank report of> > >2003 (Report No. 25797-IN) also state that> > >interest rate charged from farmers and SME is> > >36% to 120% per year.> > >> > >Access to Rural Credit – Page 108! of WB- 25797- IN> > >> > >[3 .8 1 India has a wide network of rural> > >finance institutions (RFIs), but a large number> > >of the rural poor remain under-served or> > >completely left out of the formal financial> > >system. There are over 30,000 commercial bank> > >branches, over 14,000 regional rural banks> > >(RRBs), and over 100,000 rural 
credit> > >cooperatives (RCCs) in addition to several> > >non-bank financial institutions. This translates> > >to about 4,700 people served by each RFI outlet.> > >However, the last available rural household> > >survey (Reserve Bank of India 1991) found that> > >only about one-sixth of rural households> > >borrowed from formal RFIs. Non-institutional> > >sources accounted for as high as 52-62% of> > >household outstanding debt. The rural non-farm> > >sector also faces constraints to accessing> > >finance. A recent study covering some 20 million> > >small-scale rural enterprises (in the> > >unorganized sector) found that commercial banks> > >reportedly meet merely 4% of the credit needs of> > 
>this sector, and micro-finance sources provide> > >another 3% of their credit needs.> > >Various estimates suggest that India’s rural> > >poor rely almost entirely on informal sources> > >(money lenders, traders, commission agents,> > >etc.) to meet their consumption credit needs, at> > >annual interest rates ranging from 36% to 120%> > >per annum.]> > >> > >My uncle told me the standard procedure in> > >Ludhiana, Punjab is moneylenders give a loan !> > >of say Rs.1,00,000/- on stamp paper. Actual> > >money released is 85% or Rs. 85,000/- and the> > >loan is payable at Rs.1000 per day or 1% per day> > >from day one.> > >> > >Compounding of 15% alone comes to 66% annually> 
> >but again Rs.1000/- returned per day lend at> > >same rate shall also fetch similar return> > >therefore actual interest rate may come close to> > >100%.> > >> > >Supply of spurious seeds, pesticides and> > >fertilizers, very low MSP and takeover of farm> > >produce by moneylenders at harvest time when> > >prices are at it lowest compounded with draught> > >or unseasonal rain destroying crops, lack of!> > >public healthcare all at add up to the financial> > >burden.> > >> > >Farmers are forced to sell their land to pay for> > >treatment of their family members or to get them> > >admissions to schools and colleges in> > >mushrooming private hospitals and educational> 
> >institutions.> > >> > >Ravinder Singh> > >September28, 2006> >> >[EMAIL PROTECTED],> >> > >> > >  hoo.com>[EMAIL PROTECTED]> > >> > >From: sudhirendar> >> ><sudhirendar@> >> > >bol.net.in>> > >Date: Sep 26, 2006 3:13 PM> > >Subject: Micro-Credit> > >To:> >> >krishnagreen@> >> > >gmail.com> > >> > >(from The Times of India, Sept 16, 2006)> > >> 
> >Death by Micro credit> > >> > >Sudhirendar Sharma> > >> > >The tragic suicides by more than 60 self-help> > >grou

Re: [Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[umesh sharma]

C-da,

Good article but if we draw the moral that
micro-credit is bad becos it is not effectively
implemented and people are dying becos of its faults
--so stop it --then the same logic can work for
stopping road travel and sea travel etc --becos people
do die in traffic and travel accidents.

Umesh

> >
> >Death by Micro Credit-2
> >
> >
> >I don’t know why writers always give interest 
> >rate charged as just 20% when in GOI report on 
> >Vidharba gave the figure to be as high as 5% per 
> >month to even 1.5% per day. World Bank report of 
> >2003 (Report No. 25797-IN) also state that 
> >interest rate charged from farmers and SME is 
> >36% to 120% per year.
> >
> >Access to Rural Credit – Page 108! of WB- 25797- IN
> >
> >[3 .8 1 India has a wide network of rural 
> >finance institutions (RFIs), but a large number 
> >of the rural poor remain under-served or 
> >completely left out of the formal financial 
> >system. There are over 30,000 commercial bank 
> >branches, over 14,000 regional rural banks 
> >(RRBs), and over 100,000 rural credit 
> >cooperatives (RCCs) in addition to several 
> >non-bank financial institutions. This translates 
> >to about 4,700 people served by each RFI outlet. 
> >However, the last available rural household 
> >survey (Reserve Bank of India 1991) found that 
> >only about one-sixth of rural households 
> >borrowed from formal RFIs. Non-institutional 
> >sources accounted for as high as 52-62% of 
> >household outstanding debt. The rural non-farm 
> >sector also faces constraints to accessing 
> >finance. A recent study covering some 20 million 
> >small-scale rural enterprises (in the 
> >unorganized sector) found that commercial banks 
> >reportedly meet merely 4% of the credit needs of 
> >this sector, and micro-finance sources provide 
> >another 3% of their credit needs.
> >Various estimates suggest that India’s rural 
> >poor rely almost entirely on informal sources 
> >(money lenders, traders, commission agents, 
> >etc.) to meet their consumption credit needs, at 
> >annual interest rates ranging from 36% to 120% 
> >per annum.]
> >
> >My uncle told me the standard procedure in 
> >Ludhiana, Punjab is moneylenders give a loan ! 
> >of say Rs.1,00,000/- on stamp paper. Actual 
> >money released is 85% or Rs. 85,000/- and the 
> >loan is payable at Rs.1000 per day or 1% per day 
> >from day one.
> >
> >Compounding of 15% alone comes to 66% annually 
> >but again Rs.1000/- returned per day lend at 
> >same rate shall also fetch similar return 
> >therefore actual interest rate may come close to 
> >100%.
> >
> >Supply of spurious seeds, pesticides and 
> >fertilizers, very low MSP and takeover of farm 
> >produce by moneylenders at harvest time when 
> >prices are at it lowest compounded with draught 
> >or unseasonal rain destroying crops, lack of! 
> >public healthcare all at add up to the financial 
> >burden.
> >
> >Farmers are forced to sell their land to pay for 
> >treatment of their family members or to get them 
> >admissions to schools and colleges in 
> >mushrooming private hospitals and educational 
> >institutions.
> >
> >Ravinder Singh
> >September28, 2006
>
>[EMAIL PROTECTED],
> 
> > >  hoo.com>[EMAIL PROTECTED]
> >
> >From: sudhirendar 
>
><sudhirendar@
> 
> >bol.net.in>
> >Date: Sep 26, 2006 3:13 PM
> >Subject: Micro-Credit
> >To: 
>
>krishnagreen@
> 
> >gmail.com
> >
> >(from The Times of India, Sept 16, 2006)
> >
> >Death by Micro credit
> >
> >Sudhirendar Sharma
> >
> >The tragic suicides by more than 60 self-help 
> >group members in Andhra Pradesh during April 
> >this year may have been subsumed under the 
> >unending spate of farmer suicides in the 
> >Vidharba region of Maharashtra but the hidden 
> >dimension of micro-credit revolution in the 
> >country has only begun to surface. Reports 
> >indicate that the actual number of suicides may 
> >exceed 200 in the SHG-saturated districts of 
> >Krishna, East Godavari, Guntur and Prakasam 
> >where intimidation of families by the 
> >Micro-Finance Institutions (MFI) against 
> >reporting the matter to police had surfaced.
> >
> >Following protests staged by mourners and 
> >enraged borrowers, ! the district authorities 
> >closed down 50 branches of two major microfin 
> >ance institutions in the state. The erring MFIs 
> >were charged with exploiting the poor with 
> >`usurious interest rate' and intimidating the 
> >borrowers by `forced loan recovery' practices, 
> >combined effect of which drove debt-ridden poor 
> >to embrace death. An anguished Chief Minister Y 
> >S Rajasekhara Reddy had lashed out: `MFIs were 
> >turning out to be worse than moneylenders by 
> >charging interest rates in excess of 20 per 
> >cent.'
> >
> >As the government began in-depth enquiry into 
> >suicide deaths and the MFIs launched themselves 
> >into damage 

[Assam] Fwd: [WaterWatch] Death by Micro Credit-2

[Chan Mahanta]

Title: Fwd: [WaterWatch] Death by Micro
Credit-2


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Date: Wed, 27 Sep 2006 16:01:50 -0700 (PDT)
Subject: [WaterWatch] Death by Micro Credit-2
Reply-To: [EMAIL PROTECTED]

Death by Micro
Credit-2

 
I don’t know why writers always give
interest rate charged as just 20% when in GOI report on Vidharba gave
the figure to be as high as 5% per month to even 1.5% per day. World
Bank report of 2003 (Report No. 25797-IN) also state that
interest rate charged from farmers and SME is 36% to 120% per
year.
 
Access to Rural Credit – Page 108!
of WB- 25797- IN
 
[3 .8 1 India has a wide network of rural
finance institutions (RFIs), but a large number of the rural poor
remain under-served or completely left out of the formal financial
system. There are over 30,000 commercial bank branches, over 14,000
regional rural banks (RRBs), and over 100,000 rural credit
cooperatives (RCCs) in addition to several non-bank financial
institutions. This translates to about 4,700 people served by each RFI
outlet. However, the last available rural household survey (Reserve
Bank of India 1991) found that only about one-sixth of rural
households borrowed from formal RFIs. Non-institutional sources
accounted for as high as 52-62% of household outstanding debt. The
rural non-farm sector also faces constraints to accessing finance. A
recent study covering some 20 million small-scale rural enterprises
(in the unorganized sector) found that commercial banks reportedly
meet merely 4% of the credit needs of this sector, and micro-finance
sources provide another 3% of their credit needs.
Various estimates suggest that India’s
rural poor rely almost entirely on informal sources (money lenders,
traders, commission agents, etc.) to meet their consumption credit
needs, at annual interest rates ranging from 36% to 120% per
annum.]
 
My uncle told me the standard procedure
in Ludhiana, Punjab is moneylenders give a loan ! of say Rs.1,00,000/-
on stamp paper. Actual money released is 85% or Rs. 85,000/- and the
loan is payable at Rs.1000 per day or 1% per day from day
one.
 
Compounding of 15% alone comes to 66%
annually but again Rs.1000/- returned per day lend at same rate shall
also fetch similar return therefore actual interest rate may come
close to 100%.
 
Supply of spurious seeds, pesticides and
fertilizers, very low MSP and takeover of farm produce by moneylenders
at harvest time when prices are at it lowest compounded with draught
or unseasonal rain destroying crops, lack of! public healthcare all at
add up to the financial burden.
 
Farmers are forced to sell their land to
pay for treatment of their family members or to get them admissions to
schools and colleges in mushrooming private hospitals and educational
institutions.
 
Ravinder Singh
September28, 2006
[EMAIL PROTECTED], [EMAIL PROTECTED]
 
From: sudhirendar 
Date: Sep 26, 2006 3:13 PM
Subject: Micro-Credit
To: krishnagreen@ gmail.com
 
(from The Times of India, Sept 16,
2006)
 
Death by Micro credit
 
Sudhirendar Sharma
 
The tragic suicides by more than 60
self-help group members in Andhra Pradesh during April this year may
have been subsumed under the unending spate of farmer suicides in the
Vidharba region of Maharashtra but the hidden dimension of
micro-credit revolution in the country has only begun to surface.
Reports indicate that the actual number of suicides may exceed 200 in
the SHG-saturated districts of Krishna, East Godavari, Guntur and
Prakasam where intimidation of families by the Micro-Finance
Institutions (MFI) against reporting the matter to police had
surfaced.
 
Following protests staged by mourners and
enraged borrowers, ! the district authorities closed down 50 branches
of two major microfin ance institutions in the state. The erring MFIs
were charged with exploiting the poor with `usurious interest rate'
and intimidating the borrowers by `forced loan recovery' practices,
combined effect of which drove debt-ridden poor to embrace death. An
anguished Chief Minister Y S Rajasekhara Reddy had lashed out: `MFIs
were turning out to be worse than moneylenders by charging interest
rates in excess of 20 per cent.'
 
As the government began in-depth en

[Assam] Fwd: [WaterWatch] Death by Micro credit

[Chan Mahanta]

Title: Fwd: [WaterWatch] Death by Micro
credit


This should be another eye-opener.

cm








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Date: Thu, 28 Sep 2006 09:39:29 -
Subject: [WaterWatch] Death by Micro credit
Reply-To: [EMAIL PROTECTED]

Moderator's Note: The concept of
microcredit can be traced back to
the idea of providing benefits to the poor through numerous small
loans for entrepreneurial activities as a way to alleviate
poverty.
Critics of the microcredit movement say that some lending programs
charge excessive interest rates.

Microcredit has been touted as a financial innovation which
enables
extremely impoverished people (mostly women) to engage in self-
employment projects that allow them to generate an income and exit
poverty. The World Bank estimates that there are now more than
7,000
microfinance institutions, serving some 16 million poor people in
developing countries. Bank experts estimated that 500 million
people
benefited from these small loans, on a total of three billion poor
people.

Due to the percieved success of microcredit, it seems to be
gaining
credibility in the mainstream finance industry. Although almost
everyone in larger development organizations discounted the
likelihood of success of microcredit, the United Nations declared
2005 the International Year of Microcredit.

But The Times of India article of Sept 16, 2006 "Death by
Micro
credit" raises stark questions which deserves unambigous
answers
from the micro-credit movement. It questions the rationale of
Microcredit which lays a debt trap through micro-enterprise
development as a substitute for meaningful economic development
and
fundamental changes in the economic policies. It does appear to
take
one's attention away from finding real answers to the very real
problem of poverty.

Moderator


Death by Micro credit

The Times of India, Sept 16, 2006

The tragic suicides by more than 60 self-help group members in
Andhra Pradesh during April this year may have been subsumed under
the unending spate of farmer suicides in the Vidharba region of
Maharashtra but the hidden dimension of micro-credit revolution in
the country has only begun to surface. Reports indicate that the
actual number of suicides may exceed 200 in the SHG-saturated
districts of Krishna, East Godavari, Guntur and Prakasam where
intimidation of families by the Micro-Finance Institutions (MFI)
against reporting the matter to police had surfaced.

Following protests staged by mourners and enraged borrowers, the
district authorities closed down 50 branches of two major
microfinance institutions in the state. The erring MFIs were
charged
with exploiting the poor with `usurious interest rate' and
intimidating the borrowers by `forced loan recovery' practices,
combined effect of which drove debt-ridden poor to embrace death.
An
anguished Chief Minister Y S Rajasekhara Reddy had lashed out:
`MFIs
were turning out to be worse than moneylenders by charging
interest
rates in excess of 20 per cent.'

As the government began in-depth enquiry into suicide deaths and
the
MFIs launched themselves into damage control measures, many
affected
families were left wondering if the government had not
played
ignorant to the modus operandi of MFIs.
The fact that micro-credit
loans earned interest in excess of 20 per cent has been no secret.
Borrower harassment by MFIs hasn't been uncommon either. Having
been
in the business of creating self-help groups and promoting micro-
credit institutions, the government cannot absolve itself from
being
in the thick of the fatal crises.

Given the fact that the commercial banking system has little
regard
to the bottom-of-the- pyramid group as being creditworthy, the
MFIs
have enjoyed unrestricted political patronage in extending credit
services to the poor. The Reserve Bank of India statistics
indicate
that micro-credit constitute no more than 15 % of all commercial
bank lending, leaving MFIs to cover a clientele of over 200
million
families in the rural areas. Taking shelter behind these numbers,
the MFIs have requested the government not to pursue the matter
further as it was detrimental to the interests of the poor!

Are MFIs genuine in catering to the interests of the poor? So it
may
seem as easy credit in rural areas has brought about significant
turnabout