Microfinance Practice: Re: [MFP] RE: Microcredit in South Africa

It takes no more than a quick glance to see that what calls itself "MicroFinance" in South Africa is 99% payday lending and the prices all range between 200% and 400% APR using the US formula (and in the thousands of a percent using the European formula).

Anyone financing the payday lenders there under the pretense of doing development is doing nothing more than hiding their high profits behind a facade of moneylending that brands itself as MicroFinance created to manipulate consumers, media, and the political system. They do all of this under the complete lie of an interest rate cap (not true price cap) that they fabricated as a way to be non-transparent in their pricing under the guise of transparency just as they are moneylenders under the guise of MicroFinance.

Chuck Waterfield

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On Tue, Oct 8, 2013 at 9:20 AM, Darius Waithaka <dnjengaus@yahoo.com> wrote:

Milford cannot be further from the truth and in addition a huge portfolio of that microcredit scheme is consumer lending which isn't an investment per se, classical Keynesian school of thought.

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From: milford bateman <milfordbateman@yahoo.com>;
To: <MicrofinancePractice@yahoogroups.com>;
Subject: [MFP] RE: Microcredit in South Africa
Sent: Mon, Oct 7, 2013 2:17:50 AM

The microcredit 'universal financial inclusion' disaster that is South Africa appears to be coming to a head. Key investors are now pulling out because they find the sector and concept to have nothing to do with sustainable development and poverty reduction. In South Africa last week, Muhammad Yunus meekly criticised the spectacular profiteering he found, but he knows where his bread is buttered, and so, as usual, he has refused to take the matter any further; that is, to CGAP, ACCION, USAID, the World Economic Forum, and all the other hardliners who stand behind the horrendously damaging commercialisation of microfinance. Over-indebtedness is peaking and a Nicaragua-style scenario where the poor spontaneously refuse to repay their exploiters is an increasing possibility.

http://www.bdlive.co.za/business/financial/2013/10/06/new-blow-for-microlenders

Milford