Prompt Cast
The Rise of Microlending: A Solution for the Excluded Masses
TLDR Microlending is a solution for the working poor who are unable to obtain startup capital from banks. It fills the gap between excluded groups and self-sufficiency by loaning to people who traditional lenders would consider risky, with a 97% rate of repayment.
Timestamped Summary
00:00
The podcast discusses the decline of the United States in the 21st century and the rise of other countries like China and India.
03:52
Microlending is a solution to the problem of excluded masses of people, generally the working poor, who are unable to obtain startup capital from banks due to their criteria for loan applications.
07:11
Microlending fills the gap between excluded groups and self-sufficiency by loaning to people who traditional lenders would consider mindlessly risky, and it has a 97% rate of repayment.
10:30
Microlending involves funding entrepreneurs in developing countries through platforms like Kiva, where users can contribute as little as $25 towards a loan that has a 97% chance of being repaid.
14:01
Microlending can be done through both not-for-profit and for-profit models, with the average interest on a micro loan worldwide being about 31%, and some for-profit models offering yields as high as 5%.
17:10
Micro lending is still a young industry that requires injections of capital to continue operating.
20:37
Micro-lending practices have been exploited by some banks, such as Banco Azteca in Mexico, who issue small loans to the poor at astronomical interest rates, driving them further into debt instead of helping them.
24:07
When considering contributing to microlending, it is important to do thorough research on the terms of repayment and the institutions involved, especially if using a mutual fund.
Categories:
Society & Culture
