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by luckylion
2187 days ago
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Is it your experience that, when giving cash money as a donation/gift to a person does not result in positive consequences, giving a microloan to that same person produces different outcomes? I assume that the people who use the (high interest) microloans for consumption would also use cash the same way, while those who use it to create a better future for themselves would do the same even when they don't have to pay it back. Basically: is it the way/circumstances you got the money that makes the difference, or is the loan instrument just filtering out more of those that would "waste" it, because paying interest isn't attractive to them (and it wouldn't be 90% consumption credits, but 99.x% if there was no credit check and no interest)? |
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In many circumstances I encounter, financial need is a symptom of a deeper need that's harder to address and might even be exacerbated by financial gifts that aren't paired with something else to address the deeper need. Don't misunderstand. The financial needs in these cases are formidable with compounding impacts to be sure, but the root problem cannot be solved just by providing financial resources in the cases I'm describing. Satisfy a cash need and you can be only providing a bridge to essentially the same situation in the near future along with the despair of not being able to get out of the cycle yet again. By deeper needs I mean things like habits that need to change, mindsets that disadvantage, relational deficits, medical issues, etc. I also don't want to imply it's always primarily the person that needs to change. There are very real systemic issues in our society that need to be addressed for all to flourish.
Poverty is debilitating. Hope is important. When we can in our help identify real assets a person has (talents, passions, non financial resources, etc.) and empower them to be a part of the solution, there's hope there--they can act in a way that gets them to a better place. It might be assisted, but they're doing it. This is very important in many cases. If I take that same person and just impersonally satisfy their need, that can communicate they have nothing to offer, and it may reinforce problematic mindsets that are keeping them down.
Ultimately, microloans are just tools. All tools needs to be employed in the right way to be effective.