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
Bookmark at:StumbleUpon | Digg | Del.icio.us | Dzone | Newsvine | Spurl | Simpy | Furl | Reddit | Yahoo! MyWeb
[...] Thе rest іѕ here: Once Celebrated Micro-Loans In India Now Causing Hυgе Social Problems Share and Enjoy: [...]