I am reading now about China's massive loaning of untenable amounts of money to countries (like Sri Lanka ) in order to put these countries in a debt trap. This reminded me of the ordinary people who are given such untenable amounts of money by banks and loan sharks.
Banks, credit card companies and of course private money lenders all over the world are loaning massive amounts of money to people ,who even on cursory evaluation, are unable to return the money.
Here are 2 examples from India. I have seen banks loaning money(lakhs of rupees) to a 82 year old retired person, who has limited pension and there is no way he can return the money to the bank unless his children bail him out...putting themselves into deep financial mess. I have seen another guy, almost 60 years old, earning less than 60 k rupees a month who has taken loans from banks, credit card companies and private loan sharks. The interest on his loans is exceeding his income! There is no way he can return this money.
Shouldn't the governments of all countries do something about this? The unscrupulous banks who lended money to people (with limited income) at low interest rates and then hiking the interest brought down the US economy and housing in 2008. The ripple effect of this was seen in countries and affected made victims of people, all over the world who had nothing to do with this! Let me give an example. The US economy was booming pre 2008...textile factories in India exporting to USA were booming. Women from villages and towns on the outskirts of Bangalore came to Bangalore, worked in these factories and sent money home to their families. Agriculture has been failing in Karnataka (where Bangalore is in) and these women's earnings supported their parents, brothers and children. When the US economy crashed, the textile factories closed in Bangalore, leaving these poor employees in the lurch. Many of these women turned to prostitution! There was no other job which would pay them as much as working in a garment factory. Some tired to work as housemaids and it simply did not pay enough to support themselves, their families and the terrible inflation in India. So do you see what I mean when I say, about ripple effects?
I am working in the mental health sector, specifically with developmentally disabled (i.e. mentally retarded) adults. I see a few of them getting into the traps of these loan sharks (money mart for example). When people with 'normal' IQ are getting into the clutches of loan sharks, can you imagine how much worse it is for people who have significantly lesser intelligence than the average population, when they get trapped into debt by loan sharks?
I strongly believe that the government needs to do a lot more than what they are doing now to curtail the legal but highly immoral behaviours of these banks, credit card companies and private monehy lenders.
My suggestions would be:
Check the income of the person to whom you are loaning the money.(they are already doing this I think)
Next, CHECK his current expenses. They are NOT doing this for sure.
Then check, what are the practical plans the borrower has to return the money. Usually, the borrowers have no workable plan to return the money. They have a fantasy plan, based on wishful thinking than reality, when it comes to returning the money. THIS is where the problem lies.
I know that banks , credit card companies and loan sharks need these fools to sustain them. Their survival becomes difficult without these foolish borrowers. Robbing is illegal and robbers are finding it difficult to survive as the government has made robbery illegal. But they do find other legal ways of earning a living. I hope that the government makes money lending to people who cannot return the money also illegal. I am sure that the lenders will find other ways of earning a honest and moral living.
Banks, credit card companies and of course private money lenders all over the world are loaning massive amounts of money to people ,who even on cursory evaluation, are unable to return the money.
Here are 2 examples from India. I have seen banks loaning money(lakhs of rupees) to a 82 year old retired person, who has limited pension and there is no way he can return the money to the bank unless his children bail him out...putting themselves into deep financial mess. I have seen another guy, almost 60 years old, earning less than 60 k rupees a month who has taken loans from banks, credit card companies and private loan sharks. The interest on his loans is exceeding his income! There is no way he can return this money.
Shouldn't the governments of all countries do something about this? The unscrupulous banks who lended money to people (with limited income) at low interest rates and then hiking the interest brought down the US economy and housing in 2008. The ripple effect of this was seen in countries and affected made victims of people, all over the world who had nothing to do with this! Let me give an example. The US economy was booming pre 2008...textile factories in India exporting to USA were booming. Women from villages and towns on the outskirts of Bangalore came to Bangalore, worked in these factories and sent money home to their families. Agriculture has been failing in Karnataka (where Bangalore is in) and these women's earnings supported their parents, brothers and children. When the US economy crashed, the textile factories closed in Bangalore, leaving these poor employees in the lurch. Many of these women turned to prostitution! There was no other job which would pay them as much as working in a garment factory. Some tired to work as housemaids and it simply did not pay enough to support themselves, their families and the terrible inflation in India. So do you see what I mean when I say, about ripple effects?
I am working in the mental health sector, specifically with developmentally disabled (i.e. mentally retarded) adults. I see a few of them getting into the traps of these loan sharks (money mart for example). When people with 'normal' IQ are getting into the clutches of loan sharks, can you imagine how much worse it is for people who have significantly lesser intelligence than the average population, when they get trapped into debt by loan sharks?
I strongly believe that the government needs to do a lot more than what they are doing now to curtail the legal but highly immoral behaviours of these banks, credit card companies and private monehy lenders.
My suggestions would be:
Check the income of the person to whom you are loaning the money.(they are already doing this I think)
Next, CHECK his current expenses. They are NOT doing this for sure.
Then check, what are the practical plans the borrower has to return the money. Usually, the borrowers have no workable plan to return the money. They have a fantasy plan, based on wishful thinking than reality, when it comes to returning the money. THIS is where the problem lies.
I know that banks , credit card companies and loan sharks need these fools to sustain them. Their survival becomes difficult without these foolish borrowers. Robbing is illegal and robbers are finding it difficult to survive as the government has made robbery illegal. But they do find other legal ways of earning a living. I hope that the government makes money lending to people who cannot return the money also illegal. I am sure that the lenders will find other ways of earning a honest and moral living.
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