Prasac interest rates

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Forktongue2
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Re: Prasac interest rates

Post by Forktongue2 » Thu Sep 21, 2017 6:42 am

I use ANZ to do the transfers in an out. They are not the cheapest but they have never messed up any transfer to date. Also they are the benchmark for all banks in Cambodia and trusted by the Cambodian government. Thats my last on this topic. cheers
epidemiks
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Re: Prasac interest rates

Post by epidemiks » Thu Sep 21, 2017 10:39 am

Alonzo, noone is saying MFIs are perfect, and many many people out here have no trust or interest in using a bank or an MFI. For those that do want or need small loans, the alternatives are tong tin, or unregulated loan sharks, at much higher monthly rates that any MFI or bank. 10% per month is not uncommon for small loans.

Of the following, which is worse?

Borrow $1000 over 24 months from a loan shark at 10% per month interest, and pay an effective rate of 214% per annum.

Borrow $1,000 over 24 months from prasac at 1.5% per month, and pay an effective rate capped at 18% per annum.

AlonzoPartriz
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Re: Prasac interest rates

Post by AlonzoPartriz » Thu Sep 21, 2017 11:29 am

epidemiks wrote:
Thu Sep 21, 2017 10:39 am
Alonzo, noone is saying MFIs are perfect, and many many people out here have no trust or interest in using a bank or an MFI. For those that do want or need small loans, the alternatives are tong tin, or unregulated loan sharks, at much higher monthly rates that any MFI or bank. 10% per month is not uncommon for small loans.

Of the following, which is worse?

Borrow $1000 over 24 months from a loan shark at 10% per month interest, and pay an effective rate of 214% per annum.

Borrow $1,000 over 24 months from prasac at 1.5% per month, and pay an effective rate capped at 18% per annum.
Loans here aren't payed back annualy. They are played back monthly. When Acleda were solely operating as an MFI, how they made their money, were real rates of over 80% p a. The other MFIs were doing much the same. The new capped rates mean they are now paying around 50% p a. Plus Wing's new lottery tickets no doubt as a chance to get ahead. (Wing accounts are used by many MFI borrowers to payoff their loans).
Many borrowers have been led down the garden path when approached to take out a loan. Cambodia has the lowest numeracy rates, but the highest financial package awareness rate in SEA and many other countries of similar stature. A large unnamed MFI here has recently been fined $100,000 for malpractices.
It's hard to see how anybody pays them back at those rates, but because they must be desperate or conned to take them out in the first place they manage to struggle and mostly win. Unless some disaster strikes like illness, bad harvest etc. Then they were much better off having borrowed from a loan shark. At least they get to keep their land. Over 50% of tier 3 lowest income loans and 20+% of tier 2 loans are taken out for these reasons., and an extremely high rate of further borrowing occurs. 50% have more than 3 MFI loans, 20% have 5 or more. Ottomh. That compounded with the fact that they take an MFI loan out, then borrow from a local money lender to pay the MFI back, and rinse and repeat sometimes up to five plus times.

Usurous loan with land title
Usurous loan without land title
Which would you choose?
The answer is, when you're desperate, you take multiple loans from both sources out at the same time. Robbing Peter to pay Paul.

Debt is a major problem for the poor here and it's very easy to see why. No true system to help the poor would reclaim their fin land on loans much less than the land's worth. Well, it happens regularly in Cambodia.

What needs to be done is to introduce a trust system built on award points and a central insurance fund to cover sickness and drought etc. All on a block chain for transparency. All funded by the UN and the world bank at 0% interest rates. If you're going to help, fucking help, is what I say.
Realistically,
The poor are better off buying bitcoin. At least they will have a real chance to get out of their dire predicaments. Don't rely on the banks or aid organisations, or the financial market boys. Most of the time they're in the situation they are because of them.

First thing I'd do if I were pm, would be to give everyone in the country that earns under ten grand a year $50 worth of bitcoin on a hard wallet. It would bolster the bitcoin market and give them a real chance for the future. Imagine if every LDC did it.

Fucking 10% pfffffft.
See crook!!!
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