Comments on: Reducing the Cost of Being Poor

By: Poor Credit Mortgages Foreclosures

Poor Credit Mortgages Foreclosures — Sun, 31 Jan 2010 22:24:36 +0000

I found your blog via Google while searching for poor credit mortgages foreclosures, thank you for posting g the Cost of Being Poor | ThinkOOB!

By: nprjunkie

nprjunkie — Wed, 04 Mar 2009 20:52:36 +0000

You should put this one on NPR. It’s exactly their speed, not that any of the listeners have ever heard of a payday loan

By: alewis

alewis — Thu, 26 Feb 2009 14:16:37 +0000

:) I notice you got in one final dig even as you said you weren’t.

I think that companies which wanted to sign up would provide accrued vacation and sick as part of the collateral for individuals, in addition to some overall collateral. The default rate should be close to zero,

By: harvardeconomist

harvardeconomist — Sun, 22 Feb 2009 17:49:35 +0000

Another thing is that large companies could do this themselves, a total disintermediation. They have accrued vacation time etc. as collateral. BUt one way or another your major point, that this is a market in breakdown, is legit even if you can’t quite articulate why it is in breakdown.

by the way, I hope you appreciated no references to your sociopathic former fiancee in my last comment. Lesson learned

By: georgem

georgem — Sat, 21 Feb 2009 13:44:27 +0000

I think these loans are illegal in some states, whcih means the terms are even worse and totally unregulated. you can’t legislate a market out of existence

By: alewis

alewis — Fri, 20 Feb 2009 22:50:33 +0000

OK, here goes:

(1) Pediatricians say that “a child is not a small adult.” Likewise, microlending is not just making small loans. There has to be something different about the process of making those loans. So this proposal would qualify as “microlending” though as noted microfinance is something related to this, but instead geared towards investment-lending, not lending to someone who needs to make ends meet. My fault for using the word “microfinance” as a category, which I did because people have heard of it because of

(2) the guy who won the Nobel Prize — who was indeed from Bangla Desh, not India

(3) I don’t know whether it’s millions or tens of millions of people who live paycheck-to-paycheck and get these loans at least occasionally

(4) It is still usury even when a quasi-governmental corporation does it, but nothing like 85% of the paycheck, which works out to hundreds of percent a year in interest. If you object to my proposal, then you object to any high-risk small lending, and too bad for you.

By: armchaireconomist

armchaireconomist — Fri, 20 Feb 2009 22:14:22 +0000

this is a whole new way of looking at it. It’s not microfinance becasue it’s not for small businesspeople, though I imagine some people use these loans becuase they have a side business, or their spouse has a business. This could make a whole new market for small lending. Microfinance, I understand, is very labor-intensive and can’t make any money. THis swwms to automate the system. BUt even 99% is still usury!

By: joelkeith

joelkeith — Fri, 20 Feb 2009 21:23:52 +0000

I think any time you create a method of lending to poor people it’s microfinance. That Indian guy came to the US to build his busniess here and screwed up. He tried to apply trhe same model there that they use in India. (I acutally think he was from Bangladesh.) he didn’t know about payday loans or anything like that. this is a much better idea than whatever it was that he did

By: firsttimereader

firsttimereader — Fri, 20 Feb 2009 19:48:01 +0000

Is this even what microfinance is? I thought it was that stuff they do in India, that that guy won the Nobel Prize for.

By: bceconomist

bceconomist — Fri, 20 Feb 2009 18:51:31 +0000

except I am not sure the numbers are right. I really don’t think “tens of millions” of people use payday loans. Maybe millions, not tens of millions. even so, a GREAT idea.