Neil's News

Nickels and Dimes

25 November 2006

Micro-finance is the business of providing very small or short term loans to individuals. Muhammed Yunus started the micro-finance ball rolling in Bangladesh and it is quickly spreading throughout the developing world.

Micro-finance in the news:
Micro-Finance: A Way Out of Poverty
Credit is a human right, says Nobel winner Yunus
Helping the poor a few dollars at a time

Meanwhile, something similar is happening in the developed world. Payday advance companies are sprouting almost as fast as Starbucks outlets. They provide small, short-term loans to individuals.

Payday advance in the news:
Stupid Investment of the Week
The Exorcism of Payday Loans
Payday loan limits are long past due

Micro-finance and payday advance are essentially the same creature. They both offer small loans to people the banks won't touch. The interesting thing is that if one offers them in the developing world one (literally) gets the Nobel prize, whereas if one offers them here one is called "criminals or devils". Eh?

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