Greed and Power
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- No Joke Howard is my Hero
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You haven't provided any substantive arguments yourself, to be fair. All you are doing is asking the same question over and over again, ladening it with unproven suspicions that they are somehow acting illegally.
For someone who claims to not be into conspiracy theories, you're doing a great job showing otherwise.
It's hard to know what your point is with this obsessive zeal. If you have some theories, post them. You have said pretty much nothing.
For someone who claims to not be into conspiracy theories, you're doing a great job showing otherwise.
It's hard to know what your point is with this obsessive zeal. If you have some theories, post them. You have said pretty much nothing.
I know I'm unloveable. You don't have to tell me. I don't have much in my life, but take it - it's yours.
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I don't believe I have written that MFIs have acted illegally. I have questioned how they enforce contracts - whether by leveraging collateral or collective responsibility. I was directly told by the director of an MFI that they sought collective responsibility for loans, and why. Who else in this thread is offering such direct evidence towards answering questions about enforcement?This Charming Man wrote:You haven't provided any substantive arguments yourself, to be fair. All you are doing is asking the same question over and over again, ladening it with unproven suspicions that they are somehow acting illegally.
For someone who claims to not be into conspiracy theories, you're doing a great job showing otherwise.
It's hard to know what your point is with this obsessive zeal. If you have some theories, post them. You have said pretty much nothing.
As for collateral, I have witnessed direct examples of loans being made elsewhere in Asia that rely on collateral. I was once on the board of a non-for-profit where an onerous collateral trap was investigated, recorded, and presented as evidence to a government - and, ultimately, to a court of law (resulting in a prosecution and legal settlement).
Those contracts were found not only to be in breach of employment law but also of those workers' human rights.
I think I've done slightly better than those posters who posit a roving posse of "more local, more evil" Clockwork Pomelo thugs. The more evidence, the better. Mine might not be footnoted. But tell me, how and why are my questions invalid?
The MFIs tell us that they are in Cambodia to help the poor. An in-depth study comes out suggesting otherwise. So far I have read some pretty thin arguments about the importance of rational decision making and personal responsibility and anecdotal stories about knee-capping thugs being the only alternative to the white knight MPIs, a supposed local reality that at least one other poster directly disputes as being the norm.
The MFIs always claim they are here for the benefit of the poor. Maybe they are. Maybe they are a necessary evil. Maybe they should be regulated as they are in Thailand or Vietnam. Maybe there are better alternatives: like the redistribution of wealth and social welfare. That would be, of course, the government's responsibility.
Last edited by ElGauchoInsufrible on Sat Mar 18, 2017 1:30 am, edited 1 time in total.
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OK . Please elaborate.ElGauchoInsufrible wrote:I don't believe I have written that MFIs have acted illegally. I have questioned how they enforce contracts - whether by leveraging collateral or collective responsibility. I was directly told by the director of an MFI that they sought collective responsibility for loans, and why. Who else in this thread is offering such direct evidence towards answering questions about enforcement?This Charming Man wrote:You haven't provided any substantive arguments yourself, to be fair. All you are doing is asking the same question over and over again, ladening it with unproven suspicions that they are somehow acting illegally.
For someone who claims to not be into conspiracy theories, you're doing a great job showing otherwise.
It's hard to know what your point is with this obsessive zeal. If you have some theories, post them. You have said pretty much nothing.
As for collateral, I have witnessed direct examples of loans being made elsewhere in Asia that rely on collateral. I was once on the board of a non-for-profit where an onerous collateral trap was investigated, recorded, and presented as evidence to a government - and, ultimately, to a court of law (resulting in a prosecution and legal settlement).
What does 'seeking collective responsibility for loans' actually mean? Could you explain?
And what do you mean you have witnessed direct examples of loans being made that rely on collateral. Pretty much every loan issued by any financial organisation in the world (with the exception of credit cards) relies on collateral. What's your point?
And what is an 'onerous collateral trap'?
I know I'm unloveable. You don't have to tell me. I don't have much in my life, but take it - it's yours.
It's really much simpler than has been suggested on 16 pages of largely uninformed nonsense.
The debt goes in the assets column. The more a company is owed, the more it is worth. Debt is only seen as a potential (not an actual) risk if it's more than six months delinquent. The fashion these days is to sell off a company's six month and more old debts to a collection company who will make their profit off charging a higher rate of interest, which swell their asset column, and the whole circus starts again. Incidentally, charging a higher rate of interest is a very shaky thing to hold up in court but they rely on poor respondent defence or none at all.
A lot of what has been discussed on here, broken knee caps, repos on farm machinery, teenage daughters (yuk) only happens in the black side of the industry. Banks don't break legs, they sell their debt at what they judge to be the right time, and before they do they consider that the more they're owed the more they can borrow. Selling debt reduces their borrowing capacity.
It's only when banks have a high risk portfolio which may be called...ahem...sub-prime, and they can't sell it that the digested hits the air circulation.
The debt goes in the assets column. The more a company is owed, the more it is worth. Debt is only seen as a potential (not an actual) risk if it's more than six months delinquent. The fashion these days is to sell off a company's six month and more old debts to a collection company who will make their profit off charging a higher rate of interest, which swell their asset column, and the whole circus starts again. Incidentally, charging a higher rate of interest is a very shaky thing to hold up in court but they rely on poor respondent defence or none at all.
A lot of what has been discussed on here, broken knee caps, repos on farm machinery, teenage daughters (yuk) only happens in the black side of the industry. Banks don't break legs, they sell their debt at what they judge to be the right time, and before they do they consider that the more they're owed the more they can borrow. Selling debt reduces their borrowing capacity.
It's only when banks have a high risk portfolio which may be called...ahem...sub-prime, and they can't sell it that the digested hits the air circulation.
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1. I mean by collective responsibility making the family, the community, the commune, the Sangkat, responsible for the debt should the debtor default. I have heard it can happen at the level of the commune. I am using the phrase loosely, non-specifically to any legal jurisdiction. But if you'd studied law you would have read a myriad of sad cases about silly parents or grandparents who put their houses up as collateral for their mad children's schemes and lost them. Told that that can happen here with personal loans. Find that easy to believe.This Charming Man wrote:OK . Please elaborate.ElGauchoInsufrible wrote:I don't believe I have written that MFIs have acted illegally. I have questioned how they enforce contracts - whether by leveraging collateral or collective responsibility. I was directly told by the director of an MFI that they sought collective responsibility for loans, and why. Who else in this thread is offering such direct evidence towards answering questions about enforcement?This Charming Man wrote:You haven't provided any substantive arguments yourself, to be fair. All you are doing is asking the same question over and over again, ladening it with unproven suspicions that they are somehow acting illegally.
For someone who claims to not be into conspiracy theories, you're doing a great job showing otherwise.
It's hard to know what your point is with this obsessive zeal. If you have some theories, post them. You have said pretty much nothing.
As for collateral, I have witnessed direct examples of loans being made elsewhere in Asia that rely on collateral. I was once on the board of a non-for-profit where an onerous collateral trap was investigated, recorded, and presented as evidence to a government - and, ultimately, to a court of law (resulting in a prosecution and legal settlement).
What does 'seeking collective responsibility for loans' actually mean? Could you explain?
And what do you mean you have witnessed direct examples of loans being made that rely on collateral. Pretty much every loan issued by any financial organisation in the world (with the exception of credit cards) relies on collateral. What's your point?
And what is an 'onerous collateral trap'?
2. Situation was: migrant workers promised the world, put up Motos and title to land to secure jobs overseas, the expenses towards which they were forced to pay for. They were treated like animals and denied wages - and worse. Eventually they escaped, ran, and subsequently lost everything for breaching the terms of their contracts - including their collateral. Fought in court. Took a while but they won.
Last edited by ElGauchoInsufrible on Sat Mar 18, 2017 2:16 am, edited 2 times in total.
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1. Ok but I don't know what this has to do in a thread dealing with MFIs in Cambodia and their alleged misdeeds. Families providing guarantees against unsecured loans is hardly unusual anywhere in the world.
2. Same point. What does this have to do with MFIs. The example you talk about seems to be related to unscrupulous employment agencies or some such outfit.
Anyway. Enough from me. I'm out.
2. Same point. What does this have to do with MFIs. The example you talk about seems to be related to unscrupulous employment agencies or some such outfit.
Anyway. Enough from me. I'm out.
I know I'm unloveable. You don't have to tell me. I don't have much in my life, but take it - it's yours.
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1. To whom is the debt sold while it can still be sold?Pu Li wrote:It's really much simpler than has been suggested on 16 pages of largely uninformed nonsense.
The debt goes in the assets column. The more a company is owed, the more it is worth. Debt is only seen as a potential (not an actual) risk if it's more than six months delinquent. The fashion these days is to sell off a company's six month and more old debts to a collection company who will make their profit off charging a higher rate of interest, which swell their asset column, and the whole circus starts again. Incidentally, charging a higher rate of interest is a very shaky thing to hold up in court but they rely on poor respondent defence or none at all.
A lot of what has been discussed on here, broken knee caps, repos on farm machinery, teenage daughters (yuk) only happens in the black side of the industry. Banks don't break legs, they sell their debt at what they judge to be the right time, and before they do they consider that the more they're owed the more they can borrow. Selling debt reduces their borrowing capacity.
It's only when banks have a high risk portfolio which may be called...ahem...sub-prime, and they can't sell it that the digested hits the air circulation.
2. What happens when the debt cannot be sold? Do MFIs then typically repossess collateral? Who does it -contractors? And if so which ones are usually employed by the biggest MPIs? Or do they just write off the debt because they are getting such high interest back from the loans still being paid off?
Thanks, great post
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[="This Charming Man"]1. Ok but I don't know what this has to do in a thread dealing with MFIs in Cambodia and their alleged misdeeds. Families providing guarantees against unsecured loans is hardly unusual anywhere in the world. [/quote]
*Suggestions have been made that whole communities have been made responsible through negotiations with existing structures of power and influence, i.e., via commune leaders. I speculated that that could put a lot of pressure on people at the local level. There's also been talk that such loan schemes could be manipulated for the purpose of grabbing land. I understand some talks have been had at quite senior levels about this, quite recently.
You then write: "2. Same point. What does this have to do with MFIs. The example you talk about seems to be related to unscrupulous employment agencies or some such outfit. "
Not sure you understand how contracts and contract law operate/s. Collateral can be put up in either sort of contract - employment or loan. They can also be tested in court.
best and goodnight
*Suggestions have been made that whole communities have been made responsible through negotiations with existing structures of power and influence, i.e., via commune leaders. I speculated that that could put a lot of pressure on people at the local level. There's also been talk that such loan schemes could be manipulated for the purpose of grabbing land. I understand some talks have been had at quite senior levels about this, quite recently.
You then write: "2. Same point. What does this have to do with MFIs. The example you talk about seems to be related to unscrupulous employment agencies or some such outfit. "
Not sure you understand how contracts and contract law operate/s. Collateral can be put up in either sort of contract - employment or loan. They can also be tested in court.
best and goodnight
- vladimir
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What part of my post suggests in any way that demanding security for a loan is wrong? I think you're assuming a lot.scobienz wrote:You write that as if it's wrong. Of course CMK will have the ownership papers until it's paid. It's a secured loan. Same happens on any collateralised loan around the world, in the same way banks hold title on houses bought with mortgages.vladimir wrote:guy I know borrowed money form CMK, they retained his motorcycle registration card/tax cert as security, and they needed a letter from his employer stating income. Dog knows what some poor farmboy does
My point was that by comparison with permanently employed people in the farmboy doesn't have the luxury of an employer's letter or something to put up.
The only thing that appears to have come out of this is that both Vietnam and Thailand MFIs (Google it) survive with lower interest rates. Why can they do it?
Perhaps the market here is saturated/ supported in some inadvertent way that it is not in Thailand and Vietnam. It may simply be that Cambodia's poverty is more extreme than that of Thailand or Vietnam, or the loaners are allowed to be more avaricious, or a combination of both.
I find it interesting that some suggest (jokingly, to cover the reality) hiking fees for visas, WP etc for TEFLers etc, but as soon as the supply and demand mantra economics affects MFIs/loan sharks the sky is rent with cries of 'no fair', and 'how will they survive?'
Selective.
ירי ילדים והפצצת אזרחים דורש אומץ, כמו גם הטרדה מינית של עובדי ההוראה.
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I'd hazard the Siem and the Yuon have a higher asset base on average. Or conversely, the Samnang & Co. have a lower asset base on average.vladimir wrote:
The only thing that appears to have come out of this is that both Vietnam and Thailand MFIs (Google it) survive with lower interest rates. Why can they do it?
Haha - my money’s on Playboy
Fair enough on your first point.
Not sure what you mean with your last paragraph though. I don't see anyone caring that much what happens to MFIs. Despite elgaucho's persistent comments otherwise, I'm not aware of anyone on here connected to them in any way whatsoever and I can think of only three posters that I know who have had savings with them and two of those haven't posted here.
Lot of fuss over nothing if you ask me. If they go out of business, the only people who will be happy are the loan sharks who will fill the void.
Me? I couldn't care less and only joined the debate to ridicule AG's nonsense insistence that people who have money with them should apologize for something vague and indistinguishable.
The only thing I would add though is that it wouldn't be supply and demand that kills them. It will be government intervention in this case. But, to reiterate; meh!
Not sure what you mean with your last paragraph though. I don't see anyone caring that much what happens to MFIs. Despite elgaucho's persistent comments otherwise, I'm not aware of anyone on here connected to them in any way whatsoever and I can think of only three posters that I know who have had savings with them and two of those haven't posted here.
Lot of fuss over nothing if you ask me. If they go out of business, the only people who will be happy are the loan sharks who will fill the void.
Me? I couldn't care less and only joined the debate to ridicule AG's nonsense insistence that people who have money with them should apologize for something vague and indistinguishable.
The only thing I would add though is that it wouldn't be supply and demand that kills them. It will be government intervention in this case. But, to reiterate; meh!
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Oh tosh. It's just you, Scobienz; you behind all of it, the Keyzer Soze of MFI investment.scobienz wrote:Fair enough on your first point.
Not sure what you mean with your last paragraph though. I don't see anyone caring that much what happens to MFIs. Despite elgaucho's persistent comments otherwise, I'm not aware of anyone on here connected to them in any way whatsoever and I can think of only three posters that I know who have had savings with them and two of those haven't posted here.
More seriously, I was interested to know what investors or directors knew.
My persistence in asking About contract terms and loan enforcement comes out of having been focused on that, partly, for some time (in the past). To me it is important because MFIs and investors seem to often make claims about being good for the poor, or their only option. But to me, loans lent in bad faith, at unpayable interest rates, might go against those claims. The study suggested that the loans were too burdensome. The government seems to think that the industry needs to be regulated. If investors pull out the poor may suffer also, some say. I don't have a buck either way... I don't like seeing poor folk rolled, is all. Would still like to hear from an anthropologist or sociologist who has studied lending. But I'll shut up now.
- ផោមក្លិនស្អុយ
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ElGauchoInsufrible wrote: To me it is important because MFIs and investors seem to often make claims about being good for the poor, or their only option.
Do they?ElGauchoInsufrible wrote: The MFIs tell us that they are in Cambodia to help the poor.
Are you confusing MFIs and NGOs?
MFIs are businesses that operate to make money for their shareholders - don't be confused about that. Maybe you could argue that about the MFIs that were birthed out of NGOs (like Vision Fund) but they are in the minority. Any MFI head who claims to be a knight in shining armour is a tool. They are meeting a need, yes, or else they wouldn't be there but they are a business.
You've said that a few times now.ElGauchoInsufrible wrote: But I'll shut up now.
some good posts coming from you on this.ElGauchoInsufrible wrote:=
The MFIs tell us that they are in Cambodia to help the poor. An in-depth study comes out suggesting otherwise. So far I have read some pretty thin arguments about the importance of rational decision making and personal responsibility and anecdotal stories about knee-capping thugs being the only alternative to the white knight MPIs, a supposed local reality that at least one other poster directly disputes as being the norm.
The MFIs always claim they are here for the benefit of the poor. Maybe they are. Maybe they are a necessary evil. Maybe they should be regulated as they are in Thailand or Vietnam. Maybe there are better alternatives: like the redistribution of wealth and social welfare. That would be, of course, the government's responsibility.
you can expect the business boys to be very resistant to any criticism of their ways."more local, more evil" Clockwork Pomelo thugs. The more evidence, the better. Mine might not be footnoted.
Here is what has happened in India since the micro-finance crisis in Andhra Pradesh where lots of people were topping themselves. No it wasn't the small operators that were the cause, but the larger organizations, the bigger banks, investors and government policy.
http://www.huffingtonpost.com/elisabeth ... 77911.htmlThe blame for this unfortunate situation falls most squarely on the MFIs that failed to restrain aggressive growth even as the market became increasingly saturated. Investors must also swallow a big spoonful of blame. Because they paid dearly for shares in the MFIs, they need fast growth to make their investments pay off.
The divvying up of blame doesn’t stop there, however. Perhaps the most important target is the public sector policy environment that has treated microfinance institutions as orphan children of the financial sector rather than helping them to build solid foundations. In fact, the environment in which MFIs have grown up could almost have been expressly designed to promote over-lending.
And here is the situation now after all the subsequent regulations, in the face of yet another major micro- finance disaster. Hopefully it answers some of your questions.
The loan portfolio of microfinance institutions (MFIs) stood at Rs.53,233 crore as of 31 March 2016, up from Rs.28,940 crore a year ago, according to data from the Microfinance Institutions Network (MFIN), a self-regulatory organization for the industry. However, this 84% jump in loans comes against a much more modest 44% increase in the number of clients, suggesting the average loan per customer is on the rise.
here's an analysis on the trend similar to the tone of Higgin's comments;Mumbai: Microfinance companies extended heavier loans to their customers in the last financial year, data showed, raising concerns the sector that emerged from a crisis not far ago may be growing too fast yet again for its own good.
The loan portfolio of microfinance institutions (MFIs) stood at Rs.53,233 crore as of 31 March 2016, up from Rs.28,940 crore a year ago, according to data from the Microfinance Institutions Network (MFIN), a self-regulatory organization for the industry. However, this 84% jump in loans comes against a much more modest 44% increase in the number of clients, suggesting the average loan per customer is on the rise.
The number of branches and employees too have grown much slower during the year, at 22% and 36% respectively.
And here 's where my money lies.Ratna Vishwanathan, chief executive officer of MFIN, linked the loan growth to the increase in client base and income levels.
“Client base has increased by 44%, which is balancing out the increase in loan book. Also, general income levels have increased which led to such a high growth pattern,” said Vishwanathan.
]Alok Prasad, a former chief executive officer at MFIN, did not agree.
“Even if income levels are up, the jump is not enough to explain an 84% growth in the gross loan portfolio,” he said, adding the growth rates may be “something to worry about”.
Prasad said the MFI sector, which shrank after the Andhra Pradesh microfinance crisis of 2010, regained momentum only after new rules from the Reserve Bank of India (RBI).
Conclusion ; the bigger banks have got into the action and are financing the bigger companies who are using pressure on sales staff to increase their borrowers - even if they can't afford it. There are increasing cases of these companies targeting individuals who already have loans with other competitors. result = chaos and, for many, disaster.In October 2010, following allegations that aggressive loan recovery tactics of MFIs in Andhra Pradesh had driven many borrowers to suicide, the state government promulgated an ordinance to curb MFI activities, sending ripples across the country.
Bad loans piled up as borrowers refused to pay back and banks declined to give loans to MFIs. In December 2011, RBI announced new regulations for the industry.
“Growth is a function of individual institutions and good leadership. But such high levels of growth is absolutely worrisome. Compared to the client base growth, the loan book growth is much higher, indicating more money is given to the same client, which is a risky situation,” said Prasad.
The institutions that have seen the sharpest increase in their gross loan books are among the largest in the sector. Some are in the process of converting to small finance banks after receiving RBI’s in-principle approval last year.
Janalakshmi Financial Services saw its client base nearly double, but its gross loan portfolio grew at a pace that was nearly double the growth in its client base.
Bharat Financial Inclusion Ltd (formerly known as SKS Microfinance) reported an 84% growth in the gross loan portfolio on a 27% growth in its client base. Grameen Kota Financial Services Pvt. Ltd and Equitas Holdings saw their portfolios grow by 75% and 53% respectively. Ujjivan Financial Services saw a growth of 64.58%.
Emails sent to Ujjivan, Janalakshmi, SKS and Grameen Kota on Thursday went unanswered. P. N. Vasudevan, managing director of Equitas, said the increase in loan portfolio was because of an increase in the ticket size of loans.
One possible reason for the increase in ticket size of loans is a change in lending rules.
In April 2015, RBI eased rules for MFIs, raising total indebtedness limit of a borrower to Rs.1 lakh, double the previous limit of Rs.50,000. This allows lenders to give out more loans to the same customers. The new rules state that MFIs can disburse loans to a borrower with a rural household annual income of Rs.100,000 as compared with the earlier limit of Rs.60,000. In case of customers in the urban or semi-urban regions, the annual income limit has been raised to Rs.160,000 from Rs.120,000 earlier. In the first disbursement cycle of the loan, MFIs can give up to Rs.60,000 out of the total loan amount. This limit was fixed at Rs.35,000 earlier. In subsequent cycles, the companies can now disburse up to Rs.100,000 as compared with Rs.50,000 earlier.
Low levels of penetration have aided rapid growth, said a bank official familiar with the microfinance segment.
“Market penetration is low which gives huge potential to grow. Current growth is aggressive; however, if we compare the pre-crisis days and today’s situation, there are positive developments such as more responsible lending and a wider geographical spread,” said this official requesting anonymity, as he is not allowed to speak to the media.
The official, however, cautioned that MFIs still serve the most vulnerable sections of society, meaning the underlying risk remains high.
P. Satish, executive director of Sa-Dhan, the second self regulatory body for the microfinance sector along with MFIN, pointed to some other likely factors.
A large part of the growth is accounted for by bigger MFIs who are on their way to becoming small finance banks, though growth shouldn’t come at the cost of neglecting loan procedures. Also, since banks have to fulfil priority sector lending norms, they give loans to big MFIs which are further given to small borrowers, thus helping banks meet their regulatory requirements,” said Satish.“
Sahib Sharma
http://www.livemint.com/Industry/MiPf3a ... bells.html
Last edited by Abou-Gor on Sat Mar 18, 2017 10:11 am, edited 1 time in total.
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