[ohazi]

Both of you are wrong.

> Another of these apps, Okash, took this logic of stigmatization even further, harvesting users’ contacts and calling bosses, parents, and friends to shame defaulters into repaying.

(emphasis mine)

This has nothing to do with free markets for risk-taking or confidence assessment. If you want markets like these to work well, you build them using information, not shame. Shame is a tool of last resort used by abusive lenders who are too lazy/stupid/corrupt to do their homework.

This is just another bog standard case of powerful actors abusing weaker ones. These lenders are targeting populations who don't have the knowledge or the resources to "correctly" default or file for bankruptcy, or to defend themselves against abuse when they do manage to do it correctly.

If the borrower defaults, the lender is supposed to stop hassling them and write off the loan. There are a whole bunch of other things they can do, but again, those things are not ethical.