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Are Loans Good For The Poor

Updated on September 20, 2014

About Payday Loans in the US

I do not write because I am experienced in managing finances but because I get loans everyday that seek funding for business. That is what most loan forms state. But when asked for more details about this loans you will be amazed by how much people are ignorant about loans. How can you take a loan to fund your wedding, or take a loan to take your family out on holiday. Not many households here go for holiday. I am just saying.

Micro-Loans

Few weeks ago I watch this youtube videos on payday loans and how these loans are doing in the US. I suppose you are familiar with these loans. I write with my own experience of Micro-loans in developing Kenya and wonder whether we are trying to put money into peoples pockets or get money out of their pockets.

Micro-Finance, an ideas of Nobel peace price winner Mohammed Yunus, is a powerful tool in equiping and empowering the poor in out society. It is obvious that these people cannot access bank loans. They just can't afford the collateral. Most them are illeteral and do not have stable income which banks can peg on as a collateral for the loans.

Although banks in Kenya are also offering Micro-loans as a way of diversifying and keeping up with the stiff competition, I feel still that loans are not helping the people. i appreciate the idea that banks are for business but it is important to acknowledge the fact most people can not afford the high interest charges that they face while seeking for these loans.

Question

Have you ever been a gurantor to a loan?

See results

Have You guaranteed someone a loan

my time in college was an eventful one. I met many knew friends and after college we still kept contact. There is this one particular friend that reached out to me one day for advise. He had guaranteed a friend a loan and he was not sure whether was in a business or not.

At the time he was contacting me auctioneers were really tracing him and he had just heard that they were at his door when he was out working on a weekend. So that day he asked and I told him if you dont want embarrassment just call them here in town and avoid making them upset and coming for you at home or where you work.

So we contacted them and they came and he agreed to pay the loan since the person he guaranteed the loan was nowhere to be found.

We are still building our lives and such thing are already happening. My question always remain are loans helpful at all. Loans are meant for business for those who are lending. But those that can not access bank loans just avoid. Look for other means like friends and family raising capital for you to start a business.

Laymans Guide to managing credit

  • Never allow yourself to sign for loans that you are not sure where they are going to be used.
  • If you have people you signed for make sure they are repaying otherwise get ready to pay for them.
  • There is nothing like mercy for loans. that only happens in zidisha.com


laymans Guide To loans

There must be that other way to fund your business. From the video i learnt that most of payday loans charge up three hundred percent in interest. This is outrageous. That is simply to say payday loan is a way to get money out of a poor mans pocket.

My friend told me that investing online and lending to people is a way to get money out of the poor people. This is a man eat man society.

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