By Neal Erickson
Internationally, microlending has been lauded as a tremendous benefit for the working poor. In Bangladesh a man named Mohammad Yunus founded the Grameen Bank in 1983, and in 2006 was awarded the Nobel Peace Prize for his work making fair priced loans available to poor working people. The Grameen Bank has been an inspiration to like-minded people around the world.
In Mexico, there have been numerous organizations formed to bring this benefit to the people (see Alvin Starkman’s article on Fundación en Via in this issue), and have a seemingly endless list of success stories of those who have used small amounts of borrowed money to make large advances in their lives. However some corporations have entered this market, and because of lack of government regulations or laws limiting excesses, have built extremely efficient, and some say obscenely profitable business models. One of the most visible of these, but not by any means the only, is Elektra/Banco Azteca. Continue reading Microlending: Mexico’s Double-Edged Sword
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