On microlending gone awry...

I've always looked at microlending with admiration, which borne out of Grameen Bank, in the hope to helping lift the very poor out of abject poverty by providing much needed financing in small amounts.

What went wrong since then, when microfinancing shifts from non-profit to for-profit, with investors rushing in to cash on this business, is a lesson for all. I'm disgusted and dismayed to hear and read about the kind of abuses of borrowers - to the extremes of publicly humiliating borrowers, to abetment of suicides - who are too poor to fend for themselves. It's equally disgusting, though I'm not surprised at all, to read the investigative report that shows SKS (the now publicly traded company) repeatedly ignores the abuses. Instead of correcting the unscrupulous practice, as the then founder/CEO had tried to do on numerous occasions, the company, backed by the board, decides to look the other way, and pushes out the whistle-blowers.

This is but another prime example to show those who thinks that free market capitalism can solve all ills, with no role of government or non-profit.

To be sure, I'm realistic enough to understand that, whoever might take up the cause to help the poor, there will be certain level of malfeasance as a result. The important thing is the checks and controls in place to ensure that the abuses are caught and corrected. In the drive to profit-taking, I do not have as much confidence in a for-profit organization, a public company no less, driven not only by the profit-making goals, but also the relentless hunger for revenue and profit growth by Wall Street.

Some things are best handled by non-profit organizations, with government oversight. The case study of microlending is a cautionary tale. If microlending has largely stayed as a humanitarian project, would the likes of the unscrupulous SKS loan officers (who push the borrowers for laon repayment, driving them to suicide) and sales (who pushes loans to borrowers that are unlikely to have the ability to repay or the skills to make good use of the funds) have been made largely redundant? Surely the subject is arguable on certain level. I do truly believe that the abuses would not have been this bad.