Comment 2740

By adrian (registered) | Posted December 22, 2006 at 14:41:36

Microcredit is the practice of extending small, unsecured loans to people who are not able to get ordinary credit (because they are unemployed, poor, lack credit history, etc.)

It has been used with great success in some developing countries. It's been in the news a fair bit recently because Dr. Muhammad Yunus, a Bangladeshi who has really developed the concept, recently won the Nobel Peace Prize. Read more about micro-credit here:

I agree with Peter that microcredit is something worth exploring in Hamilton. Many people in Hamilton need short-term loans, as the lineups at local payday lending companies will tell you. The main difference between microcredit and payday lending, of course, is that payday lending is ridiculously expensive. Rather than allowing people to escape their poverty, payday loans drive people into ever greater debt. I wrote an entire article about that on RTH:

Payday lending is another example of a downward spiral into poverty, like the cop who gave the man with no license and insurance all the tickets. The fact that poor people generally pay more for their basic goods and services is another. The people who can least afford it tend to pay the most.

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