Microfinance Loan companies are predatory lenders

Cambodia news in English! Here you'll find all the breaking news from Cambodia translated into English for our international readership and expat community to read and comment on. The majority of our news stories are gathered from the local Khmer newspapers, but we also bring you newsworthy media from Cambodia before you read them anywhere else. Because of the huge population of the capital city, most articles are from Phnom Penh, but Siem Reap, Sihanoukville, and Kampot often make the headlines as well. We report on all arrests and deaths of foreigners in Cambodia, and the details often come from the Cambodian police or local Khmer journalists. As an ASEAN news outlet, we also publish regional news and events from our neighboring countries. We also share local Khmer news stories that you won't find in English anywhere else. If you're looking for a certain article, you may use our site's search feature to find it quickly.
pobrecito
BANNED
Posts: 9
Joined: Tue Aug 13, 2019 10:33 am
Reputation: 4

Re: Microfinance Loan companies are predatory lenders

Post by pobrecito »

No different from payday loan companies in the USA they're everywhere
rubberbaron
Expatriate
Posts: 192
Joined: Sat Mar 14, 2015 2:56 pm
Reputation: 54
Cambodia

Re: Microfinance Loan companies are predatory lenders

Post by rubberbaron »

Anthony's Weiner wrote: Tue Aug 13, 2019 9:58 am
What Is Microfinance?
Microfinance, also called microcredit​, is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. While institutions participating in the area of microfinance most often provide lending—microloans can range from as small as $100 to as large as $25,000—many banks offer additional services such as checking and savings accounts as well as micro-insurance products, and some even provide financial and business education. The goal of microfinance is to ultimately give impoverished people an opportunity to become self-sufficient. https://www.investopedia.com/terms/m/microfinance.asp

Yes, rubberbaron, I am sure your butt is sore if you are paying those interest rates given your amazingly successful business, I am surprised that you were not offered private financing. Oddly microfinance companies are not in the business of lending to such exemplary business tycoons or those with the vast holdings you so proudly display, which make their loans more tenuous. I agree that the mfi s do not charge as much as the market loan sharks and likely do not have a company policy to break legs if the loan is not repaid on time. You are also correct that the U.S. is practically broke, though I doubt it is a major concern to Cambodians seeking loans from microfinance companies or even relevant to the topic being discussed.
Surely you and others like yourself do not get anywhere near 10% interest on your savings, I am surprised that one would invest in a working rubber plantation given rubbers long slide since February of 2011. Certainly, if you were to lend the $200,000 out at 18% on a 7-year term your return would be $153,099.68. Quite a tidy profit for sitting on one's duff and patting themselves on the back for their effort to help impoverished people become self-sufficient.
18% on a secured loan is robbery, plain and simple. Poor, financially ignorant people of little means are being royally F ed. It doesn t matter what the rich are charged in interest, whether the USA is broke or how long one has to wait in line at the food back in Selma, Alabama. If Cambodians are to be able to lift themselves out of poverty they will need help. Financial education, contracts that are written in a simple language where the clauses are understandable and reasonable interest rates would go a long way to solving the problem.
Well, Arthur, my butt is not sore, this was just for comparison purposes. lending rates in Cambodia in general are outrageous. I shy away from private loans. Obviously, this was not for plantation funding but another business I owned. Since then I sold both rubber plantations, the other business, and my house. I certainly didn't lose any money on any of them. Incidentally, I got the rubber plantations when prices were high and my ROI was over 25% for the first few years, and what with the declining prices ended up at a 9.6% average. Including the sales price my return was well above the 18%. BTW, I did employ up to 50 people, sometimes even more.
As for investing, there are still ways to earn rates pretty close to the 10%.
Keep your self-righteousness to yourself. It is misplaced in this context.
The big institutions like ADB, etc., keep warning of the indebtedness of Cambodia, this is why I used the U. S. as an example.
Your suggestions about education, etc., apply just as well to all the developed countries. Cambodia is not singular just because it is a semi-developed country and has such a history. Overall your response is very enlightening indeed and we all do appreciate your superior knowledge.
Anthony's Weiner
Expatriate
Posts: 1634
Joined: Tue Nov 21, 2017 4:00 am
Reputation: 1076
United States of America

Re: Microfinance Loan companies are predatory lenders

Post by Anthony's Weiner »

rubberbaron wrote: Tue Aug 13, 2019 1:04 pm
Anthony's Weiner wrote: Tue Aug 13, 2019 9:58 am
What Is Microfinance?
Microfinance, also called microcredit​, is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. While institutions participating in the area of microfinance most often provide lending—microloans can range from as small as $100 to as large as $25,000—many banks offer additional services such as checking and savings accounts as well as micro-insurance products, and some even provide financial and business education. The goal of microfinance is to ultimately give impoverished people an opportunity to become self-sufficient. https://www.investopedia.com/terms/m/microfinance.asp

Yes, rubberbaron, I am sure your butt is sore if you are paying those interest rates given your amazingly successful business, I am surprised that you were not offered private financing. Oddly microfinance companies are not in the business of lending to such exemplary business tycoons or those with the vast holdings you so proudly display, which make their loans more tenuous. I agree that the mfi s do not charge as much as the market loan sharks and likely do not have a company policy to break legs if the loan is not repaid on time. You are also correct that the U.S. is practically broke, though I doubt it is a major concern to Cambodians seeking loans from microfinance companies or even relevant to the topic being discussed.
Surely you and others like yourself do not get anywhere near 10% interest on your savings, I am surprised that one would invest in a working rubber plantation given rubbers long slide since February of 2011. Certainly, if you were to lend the $200,000 out at 18% on a 7-year term your return would be $153,099.68. Quite a tidy profit for sitting on one's duff and patting themselves on the back for their effort to help impoverished people become self-sufficient.
18% on a secured loan is robbery, plain and simple. Poor, financially ignorant people of little means are being royally F ed. It doesn t matter what the rich are charged in interest, whether the USA is broke or how long one has to wait in line at the food back in Selma, Alabama. If Cambodians are to be able to lift themselves out of poverty they will need help. Financial education, contracts that are written in a simple language where the clauses are understandable and reasonable interest rates would go a long way to solving the problem.
Well, Arthur, my butt is not sore, this was just for comparison purposes. lending rates in Cambodia in general are outrageous. I shy away from private loans. Obviously, this was not for plantation funding but another business I owned. Since then I sold both rubber plantations, the other business, and my house. I certainly didn't lose any money on any of them. Incidentally, I got the rubber plantations when prices were high and my ROI was over 25% for the first few years, and what with the declining prices ended up at a 9.6% average. Including the sales price my return was well above the 18%. BTW, I did employ up to 50 people, sometimes even more.
As for investing, there are still ways to earn rates pretty close to the 10%.
Keep your self-righteousness to yourself. It is misplaced in this context.
The big institutions like ADB, etc., keep warning of the indebtedness of Cambodia, this is why I used the U. S. as an example.
Your suggestions about education, etc., apply just as well to all the developed countries. Cambodia is not singular just because it is a semi-developed country and has such a history. Overall your response is very enlightening indeed and we all do appreciate your superior knowledge.
It's Anthony not Arthur. I am most sorry that you found my stating the purpose of micro-financing to be sanctimonious. You will note it is not my definition and as such, I stated the source. I do not believe it to be sententious for an organization or industry to comply with the stated goal of the organization or industry and am sure with your vast and highly successful business career, you must no doubt agree. I can imagine the heartache that you would feel if you took your Rolex Grand Mariner to what was advertised as a certified Rolex dealer only to have it repaired with lesser quality parts, say Baume and Mercier for example. Truly the consequences of misstating ones real motives are not just often fraudulent but life-altering for some. I am more than happy to suggest that you seek the definition of the term in Webster's, Cambridge or a plethora of other dictionaries. Microfinance goal is to lift others up, altruistic perhaps to some but that is the goal. I applaud you for employing up to 50 and sometimes even more while making an ROI of over 18%. I find that often employers feel that simply by employing someone, perhaps at a minimum wage or even slightly better they are doing a good deed, being benevolent so to speak, when in fact they are very generously enriching themselves as you have very proudly stated. Oddly being wealthy is not the sole determiner for happiness, you must be aware that Costa Rica with a GDP per capita of 11,630USD scored higher on the World Happiness Index than the USA with its GDP per capita of 59,531USD. Compassion and empathy while difficult to monetize are actually important components of happiness. That said, I again applaud you on the profitable sale of your rubber business, your other business and your home and are most awed by your thanking me for my "superior knowledge" on behalf of others, very few forum members are so cocksure of themselves to speak for all. Now that you are out of the robber business do you feel robberbarron really is the best moniker for you? have you thought of King of Liquidity? Now that is a name that would really show greatness in achievements.
willyhilly
Expatriate
Posts: 1758
Joined: Sun Jan 17, 2016 7:11 am
Reputation: 357
Location: Australia
Albania

Re: Microfinance Loan companies are predatory lenders

Post by willyhilly »

Microfinance is expensive at 18% PA by world standards. But when you consider informal loans cost 20% a month it is cheap.
Post Reply Previous topicNext topic
  • Similar Topics
    Replies
    Views
    Last post

Who is online

Users browsing this forum: Ahrefs [Bot], Majestic-12 [Bot] and 869 guests