In this podcast from HowStuffWorks.com, you will find Josh and Chuck discussing the pros and cons of microlending on a global scale. Microlending is a practice that provides funds for entrepreneurs in developing third-world countries who could not attain normal loans through standard traditional banks. Much of this problem attributes to the fact that these individuals do not have the necessary collateral, and at times, education or credit history, to meet the criteria for bank loans. This in turn results into a generalized gap where traditional financial resources are limited, if not excluded, from a group of self-sufficient people. To solve this problem, many microloan firms have a large mass of people with the option to fund their entrepreneurial ventures. Still, even with good intentions, there are always problems. At times, the financial gesture will not always follow through where a loan could be used for other expenses, like a wedding or monthly rent, than its intended use. In addition, many microloan firms have been linked with money profiteering where firms are said to take full advantage of these individual’s situations. Even with these negatives, we have to understand that the amount contributed to these individuals in developing worlds have a huge impact on their lives.
If you would like to listen to the podcast, please click the link here: Could Microlending Develop the World