So let's bring this home.
I read this article a month or two ago, and I keep coming back to it. It's about a charity named JIFFI that some students at Notre Dame started, essentially lending money in order to help people break out of dependence on payday loans and other crazy/high interest rate loans.
A bit of background. While I'm not sure this technically falls under the category of a micro-loan it's based on a rather similar concept. I've personally been following the concept of micro-lending for years now - ever since I heard about the Grameen Bank back in college - and the basic idea is pretty simple. Let's say I make money driving a rickshaw. I make $20 a day, but I have to pay $10 a day to rent the equipment. If I take out a small loan, I can pay back that loan with my profits and eventually own the rickshaw free and clear...and basically double my income (once the rickshaw is paid off). Same principle can also be applied to getting a cow, which can make a huge difference in household income as I start selling off milk, butter, yogurt and cheese. Or buy chickens so I can start selling eggs.
I like the idea that we can use loans and financing in a positive way, rather than adding to the growing income inequality we see today.
Programs like this, to me, sound like the exact reverse of an anecdote that I sometimes ponder about how and why some people profit off of debt. This anecdote, btw, also makes me think of Shay's Rebellion.
Both raise great questions about the role of debt, financing, and self-sufficiency in an economy (as well as the potential for unrest if the system is not perceived as just.)
So I have this idea in my head of a non-profit like JIFFI, described above. It might focus on more than just predatory payday lending, maybe try to provide a lower interest rate for debtors who have never missed a payment. It would not really be debt consolidation, because most of the debt consolidation programs I see really fall under bankruptcy regulations.
The only problem is...well, there's a ton of problems with this:
I read this article a month or two ago, and I keep coming back to it. It's about a charity named JIFFI that some students at Notre Dame started, essentially lending money in order to help people break out of dependence on payday loans and other crazy/high interest rate loans.
A bit of background. While I'm not sure this technically falls under the category of a micro-loan it's based on a rather similar concept. I've personally been following the concept of micro-lending for years now - ever since I heard about the Grameen Bank back in college - and the basic idea is pretty simple. Let's say I make money driving a rickshaw. I make $20 a day, but I have to pay $10 a day to rent the equipment. If I take out a small loan, I can pay back that loan with my profits and eventually own the rickshaw free and clear...and basically double my income (once the rickshaw is paid off). Same principle can also be applied to getting a cow, which can make a huge difference in household income as I start selling off milk, butter, yogurt and cheese. Or buy chickens so I can start selling eggs.
I like the idea that we can use loans and financing in a positive way, rather than adding to the growing income inequality we see today.
Programs like this, to me, sound like the exact reverse of an anecdote that I sometimes ponder about how and why some people profit off of debt. This anecdote, btw, also makes me think of Shay's Rebellion.
Both raise great questions about the role of debt, financing, and self-sufficiency in an economy (as well as the potential for unrest if the system is not perceived as just.)
So I have this idea in my head of a non-profit like JIFFI, described above. It might focus on more than just predatory payday lending, maybe try to provide a lower interest rate for debtors who have never missed a payment. It would not really be debt consolidation, because most of the debt consolidation programs I see really fall under bankruptcy regulations.
The only problem is...well, there's a ton of problems with this:
There’s other non-profits doing similar work. I would need a business plan, and how much is realistic? $1 million? More? Less? I don’t know enough about banking, or
government regulations for non-profits and banking. I don’t have any backers. I don't even know anybody who could be a backer. I suck at fundraising (as the annual Big
Brothers Big Sisters bowling fundraiser reminds me). I don't really know much about grant writing, or whether I could get enough grant money to make it work. It’s too idealistic. Too risky.
I have a mortgage and car payments and don't really want the uncertainty. I don't know enough about underwriting, or the credit system.
And on, and on, and on. Yet I keep circling back to it. It would be something...meaningful. It could make a huge difference in people's lives. And what would it be like to see sand start sliding down the sand dune?
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