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A few years back micro loans was celebrated as empowering poor population in India, to take risk in starting a small personal business thereby bettering the lives of community. This all sounds good in theory and practice, but as with anything involving
debt the results aren’t usually according to plan.

Personally…any debt is bad debt, if you can start a business with savings as opposed to taking on a big debt then do it and don’t get into debt. You’re business will grow organically and probably won’t grow as fast, but you also don’t have the psycholigical trauma associated with debt.

In India, borrowers of these micro loans are experiencing severe, psychological unrest and stress. There have been many many reports of borrowers of these micro loans unable to pay back their loans and commiting suicides. There have also been reports that the establishments that are doing the lending, small banks are using threats and mind games to force their borrowers to pay (loan sharks), needless to say that the suicides, living under threats is causing huge problems in various communities.

Copy and paste the links below to see a video and read addtional articles on this subject.

http://tv.ibtimes.com/on-location-india-micro-finance-woes/331.html

http://www.bloomberg.com/news/2010-12-28/suicides-among-borrowers-in-india-show-how-men-made-a-mess-of-microcredit.html

This entry was posted on Tuesday, April 5th, 2011 at 7:25 am and is filed under Debt Management, Health, Money. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.