Ten Years to Realise that Usury Harms the Poor
There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.
—Hamlet, Act I, Scene 5
Hamlet was right: life is full of things and we can never understand more than a few things, but there is way to understand quickly by looking at the subject in an abstract manner. Following this method I could easily judge that Micro-finance was a scam that would hurt the poor much moor than it would help them. How did I realise this minutes after hearing for the first time about this practice? I abstracted Micro-finance to its essence: usury.
Let me now point you to a very interesting interview with a gentleman who worked in Micro-finance for ten years. He had misgivings about it from his first job and yet needed ten years to realise how harmful it is. I advise you to read the whole interview, one part stands out for me:
Well, one of the things people say is very important is microsavings, the poor need to be able to save, the poor need insurance, and so on. The poor need all sorts of things – but the problem is that only one thing is extremely profitable for microfinance institutions and their investors: credit.
—Interview with H. Sinclair, Microfinance ‘Heretic’, October 4, 2012
In Micro-Usury shows its Ugly Face I wrote: “A postal bank will slowly introduce the concepts of finance and lending, starting with saving and not borrowing.” When I heard that people want to combat poverty with credit (i.e. borrowing) I quickly realised that Micro-finance is a trap to suck the poor into usury. Unfortunately this gentleman, even after 10 years of experience, thinks that Micro-credit can be improved with regulation. I can only repeat what I already have said:
To understand life first-hand experience without solid philosophical foundation is of little value. The writer thinks that usury-bondage is a wonderful thing, which should be celebrated. She thinks that destroying the family structure of the poorest people in one of the poorest countries in the world is “help”.
Having wealth, power, technology, et cetera. The West decided to make its life easy by rejecting sound philosophy; the result is the decline and imminent fall of the West.
Hugh Sinclair makes a perfect case why Micro-credit does not work neither economically nor ethically, I only wish he had realised that in less than ten years.