FINCA: A charity which breaks lives
Financial landscape in rural Kyrgyzstan
Many will tell you that the economy of Kyrgyzstan collapsed with the Soviet Union [1]. But what it means for the lives of people is less understood.
Until the 1920s Kyrgyzstan was mostly tribal with an ad-hoc economy and when the soviet union came about, it essentially set the status quo for the economical system. Kyrgyz people understood the economy the soviet way, through collective ownership, state-guided projects. In a nutshell, the state ran virtually every material aspect of people’s lives including and especially financial matters.
A happy story of an successful shopowner. [2]
A business owner sell goods at a shop. The shop is state owned and so are the goods. In the morning, he goes to the state-operated storage to refill the shelves. There is only limited choice which not necessarily meet customer demand but customer demand doesn’t have to be met because there is virtually no market competition.
Because his wife’s uncle is celebrating the birth of her second child (social event) and everyone brings gifts, the business owner snatches some jeans smuggled from East Germany to bring as a gift.
At the end of the day, the owner hands his profits to the appropriate authorities. His performance is rewarded either in cash or in social status. For example, the authorities will provide him a car for having exceeded expectations. Rinse and repeat until the end of time in 1991. This is a happy ending.
This left the Kyrgyz largely unprepared for the rapid switch to capitalism. In rural Kyrgyzstan it was analogous to a black swan event. Saying that villagers born under the USSR had no understanding of money is, strictly speaking, a false statement. But from the point of view of you, westerner, reading this article, it is the closest description I can give of the truth.
A straightforward example is confusion between profit and revenue. Village life suffers from two both fun and terrible features: short-term memory and vivid social interaction (which has not been slowed down by covid one bit).
A happy story of an unsuccessful shopowner.
A business owner will have a good day selling goods at his shop. But because his wife’s uncle is celebrating the birth of it’s second child (social event) and everyone brings gifts, the business owner spends the 3/4 of his revenue to buy a cow to bring as a present.
The shop owner struggles to replenish his stock and swears to spend his revenue more responsibly the next time.
But the next day, the sun is shining, and the belief in miracles is at an all-time high, the business owner owner to recover by buying some cheap watermelons with the little money he has left. Those can be dirt cheap at the watermelon farm because nobody wants watermelons this time of year. But because miracles happen to those who believe in them, watermelon-hungry customers will come to his shop and buy them all!
But at no surprise, because it isn’t watermelon time, nobody buys the owner’s watermelons and they go bad after a week. And because there is no shortage of uncles organizing events for second children, the poor man keeps bleeding capital, wether or not his day is profitable.
Eventually he cannot pay rent for his shop, the shop closes and he is out of work. This is also a happy ending.
What we call a collapsing economy at a macro-level is in fact a myriad of businesses sprouting and crashing like mushrooms after the rain with a bunch of people running around in panic with zero clue what is going on and how to navigate the free market… because it’s not like capitalism came there with a manual.
And where there is chaos there is opportunity for gain and charity and that’s where international non-profits come in with microcredits filling their magazines to rain hellfire on poverty until everyone is drowning in so much cash that prosperity is the only outcome. Or is it?
A sad story of an unsuccessful shopowner. [3]
A business owner will have a good day selling goods at his shop. But because his wife’s uncle is celebrating the birth of it’s second child (social event) and everyone brings gifts, the business owner spends the 3/4 of his revenue to buy a cow to bring as a present.
The shop owner struggles to replenish his stock so he takes a microloan. The microcredit is so huge, several times his monthly salary… how can he be greedy with such an income? So the shop owner buys a second cow, spending 150% of his day’s revenue. But the poor owner already considers the microcredit to be his revenue. How could he not? All the money he ever owned was always his and owning money that isn’t his is such a non-intuitive concept. As to reinforce this belief, the credit only has to be repayed next month… that far in the future, he’ll certainly be rich because miracles happen to those who believe in them.
So he goes to buy a cow for his sister and a brand new car for his wife. And invites all of his family to a nice restaurant to celebrate such an exceptionally profitable day. This is usually the time when he gets featured on the microcredit’s company website as success story.
Very quickly, the owner has spent most of his loan on non-business related matters and has only 25% to reinvest in his venture. Which he does by buying cheap watermelons and we all know how that goes from the previous story.
The shop goes bankrupt and closes. But the tale doesn’t end there. The owner still needs to repay his loan, with interest. So he mortgages his house and sells his wife’s uncle’s child into slavery. In case you did not notice, this isn’t a happy ending.
Microcredit in rural Kyrgyzstan
Microcredit in Kyrgyzstan is very easy to come by. It is available to virtually everyone with very little verification (most of the time a passport is required). This plays into the weakness of people who will often consider the benefits while downplaying or completely ignoring the risks. This leads to overconsumption of non-essential goods and lack of essentials at the same time.
An acquaintance of mine was selling furniture for 40,000 KGS, a 10,000 KGS discount of the original 50,000 KGS price. Wanting to seize the opportunity, I took a loan with 25% yearly interest (10,000 KGS per year). It has been one year I am paying this loan and am only half done, not having enough for essential things. I am paying more for this discounted furniture than if I had bought a new one. — Burul, 37, Issyk-kol region
There are 58 banks and 168 microcredit companies which provide micro-loans in Kyrgyzstan [4]. Most of them also cover much of central asia and other parts of the third world. The main ones are:
- Mol Bulak: This is one of the more infamous lending institutions with agressive lending behaviors. I could not precisely determine the origin of the organization but they are operating in Russia and Central Asia. Their funding source appears to be British-based Schroders Group [6], an asset management firm which channels the funds through a “responsible investment” arm called BlueOrchard with offices in Zurich [7] and Luxembourg. Finally, the money transits through the Mongolian-based TenGer Financial Group [5] to Mol Bulak in Kyrgyzstan where it is lent to poverty-struck people at high (>30%) interest rates.
- ADB bank: development bank based in the philippines, largely self-funded
- Finca international: US-based, funded through multiple channels and the most interesting one in many regards because it markets itself as a non-profit charity all the while being a bank lending at high interest rates. It is also an organization, us in the west, have the closest relationship with. We are going to discuss FINCA at length from now on.
Overall, microcredit organizations issued loans of 12.1 billion KGS (1.8 % of the country GDP) [4] many of which cannot be repayed resulting in people losing their homes, livestock, divorcing because of the psychological pressure that the banks apply on them. The psychological pressure is not a side-effect of the lending business, it is a design feature.
Kyrgyz society is built on a strong culture of shame which is destructive in many ways. There are several well-known examples of shame culture, all of which disproportionately target women. The most talked about arguably are honor killings. Another, less spectacular but more common, is forcing a young girl to mary their kidnapper and rapist [8] because of the shame of her not being a virgin. Because the shame on the family is so great that it is unbearable, the girl will do anything, including spending the rest of her life with her attacker. To understand the culture of shame one must not only understand its evil but also its unique reliability: in a society where nothing is ever guaranteed and no promise has any meaning, shame is the one thing that will consistently guarantee results: the victim will comply.
In microcredit banking the same concept can be adapted to ensure a surprisingly reliable return on investment by shaming the villager who took the loan to pay back by any means necessary. The shaming doesn’t even need to be done in a grandiose manner, letting other villagers know that a certain individual does not meet the debt obligation.
To eliminate the need for collateral […] banks rely on a variation of the solidarity lending methodology. […] Each member of a village bank ensures the loan of every other member. This system gives rise to an atmosphere of social pressure within the village […], where the cost of social embarrassment motivates bank members to repay their loans in full. […] This method has proven very effective for FINCA, yielding a repayment rate of over 97% in its worldwide network. — John Hatch, founder of FINCA
Just as the previously mentioned shame-based methods, village banking is also unapologetically targeted at women. Of course, in the case of micro-loans, it is marketed as “financially empowering women” while that may very well be the case [10], it is nonetheless hard to dispute that the village banking methodology will be substantially more effective if it target-shames women in a society where they are already routinely shamed for other causes.
My brother argues with his wife all the time because of FINCA’s credit. People are divorcing because of this problem — Aziza, Karakol region
Add to this a population with no financial education, used to their material assets to be managed by the soviet state and a disregard for worrying about the future… and you get a microcreditor’s wet dream. What kind of women does FINCA lend to? You’ve guessed it, predominantly female heads-of-household [11] (read: older women), many of which grew up under the soviet union.
FINCA in Kyrgyzstan
Finca is not like other microcredit organizations present in Kyrgyzstan. It is infinitely more subtle, doing its best to appear well-intentioned almost until the finish line but all things considered, hurting and taking as much or more than others who do not have the skills to play the PR game.
Let’s start with the basics. Most of microcredit organizations are banks and so is FINCA. But it is also not. On the western side, as it appears to the IRS, Finca international, the parent company, is a non-profit charity which of course, is tax-exempt [12].
The web page looks as you would expect: a supposedly empoverished woman of color doing a a manual task which has an easy to understand public unility purpose: sewing masks. Intended message: we, FINCA, help people in need to make a better world.
But this isn’t the webpage FINCA customers see. That would look like this:
On the Kyrgyz version of the web page, the simplicity and lack of accountability of taking a loan is front and center. And it works wonders. People go to FINCA like they go to disneyland and the loan center in Karakol is growing fiercely.
How FINCA lends money
In the marketing material aimed at the west (on youtube, in English), we are led to believe by FINCA that we can “give a little to change a lot” [14] which is naturally interpreted (while not explicitly said) that FINCA provides people in need with microloans of a few hundred dollars (micro means small — right?) and that is enough to change lives long term. Instead, the bank distributes loans the size of lottery tickets to people with no money management skills… no wonder this ends badly!
A typical FINCA loan is of the order of thousands of dollars:
Let’s put the above loan into perspective. FINCA provided the microcredit for a total amount of 250,000 KGS which amounts to 3,000 USD.
The average net salary in Kyrgyzstan is reported to be USD 630 [13]. This figure is weighted towards the more expensive capital city, Bishkek. In rural parts, it is often half as much. And FINCA does not target the average Kyrgyz, they pride themselves to target the most destitute. The loan provided by FINCA is nearly 10x the typical salary of that canton. What’s worse, in this specific case the salary of the person who took this loan is just barely higher than the monthly interest (160 USD per month). Which means that the bank provided that individual with a loan equivalent to 15 months of his salary. That is hardly a microloan!
That is provided the person manages to get 15 months of salary which is not guaranteed since the loan was taken in the middle of the COVID crisis.
Below is an excerpt of the interview I had with the sister of the person who has taken the credit:
Me: Am I to understand that if he cannot repay his loan, Finca is going to seize all of his cows?
Sister: That is correct
Me: And if that happens, what will your brother have left?
Sister: Nothing. The interest he pays to FINCA is everything he makes from his shop, he is paying to FINCA everything that he has.
Not only is FINCA misleading in how much money they lend in their “microcredits” they are equally dishonest as the purpose towards which the loan is taken [14]:
Many can’t send their children to school because they can’t pay school fees. Many can’t send their children to the doctor when they are sick. That’s where FINCA’s village banking loans can make a difference. — Rupert Scofield CEO of FINCA
In Kyrgyzstan, a large portion of FINCA loans are taken to repay existing loans. Even if there is a need to go to the doctor, repaying a loan will take priority because avoiding shame is more important than health.
Ironically, FINCA is the reason parents cannot pay school fees because they are too busy paying back the high interest rates of their microcredit. And it doesn’t stop at parents, countless children and young adults are sacrificing their own education because they need to save their families drowning in debt.
This is precisely the genius that makes FINCA stand out compared to the other microcredit banks: FINCA creates and amplifies the problems they claim to solve. They then point at the newly manufactured socioeconomic issues, at the emerging mass of newly over-indebted people desperate for more loans to reimburse their current ones and say: those people need us!
And they are right, FINCA is needed more than ever. It is even not unseen for the same person to take an additional FINCA loan (sometimes through another family member) to repay an ongoing FINCA loan.
I was top of my class in high school in my village. When I graduated, I got a scholarship that would allow me to study physics for free. However, I had to drop my studies because my parents were drowning in microloans. A big portion of those microloans was FINCA, several credits, several thousand dollars each. The purpose of the loans was just to pay interest on other loans, they did not improve our lives in any way. I put my college, my career, my young years on hold and worked in a sewing factory 12 hours per day. My brother worked construction in siberia in dangerous cold conditions to help repay that loan. But our combined efforts were barely enough to cover the interest, we could not even touch the base capital. — Aiperi, Aksuu region
Are the loans actually repaid?
We seem to be faced with a contradiction:
- On one hand, we are finding out that FINCA gives loans too big for people to handle much less to repay
- On the other hand, FINCA reports a 97% repay rate
In order to address this, we have conducted an experiment over the course of several years. We have lent money to a small group of people in the Aksuu region. At the difference of FINCA, we did not use any means of psychological coersion to recover our money and we did not ask for any interest to make payment easier. Unfortunately the sample size is very small but the results at least give us some intuition about what the real repayment rate would be.
Our small experiment nudges us to think that when no coercion is applied, the ratio of successfully repaid loans is 63% (compared to 97% for FINCA) in terms of number of loans and falls to 9% in terms of capital. While I can’t stress enough the lack of statistical value in such a small sample size, stating that I don’t expect a loan given financially uneducated people in need and already in debt to yield me a profit somewhat seems more believable [15] than I expect a loan given financially uneducated people in need and already in debt to yield me double digit returns. Which is basically what FINCA states by giving double-digit yearly interest rates while keeping near-full ratio of repayment.
We also noticed that bigger loans given for longer periods of time are almost never repaid. This is easily explained by the lack of ability to plan the future and the difficulty to comprehend big amounts (>1000 USD compared to 1500 USD yearly salaries for the surveyed sample).
We have had the chance to dig deeper into one case which illustrates very well to which point large amounts of money are not understood and how injecting those amounts into households only contribute to more trouble.
The sad story of an internationally sponsored family [16]
A household of 5, parents, 2 sons and one grandchild also have a daughter who married a successful Japanese businessman. The family income is non-existant, nobody is employed. Their sustenance comes from their garden and additional sales of dairy products at the local market. An optimistic estimate would put their income at 150 USD per month.
To increase their lifestyle, the family routinely borrows money from FINCA, other microcredit banks as well as loan sharks. Before their daughter marries, their loans total about USD 10,000 (or 5.5 years of income provided there are zero expenditures), USD 3300 of which comes from FINCA alone.
The Japanese businessman however, nets over USD 10,000 per month and is able to repay the total balance instantly as well as provide a significant cushion (about USD 5000) to increase the family’s lifestyle without them having to contract additional loans.
However, because taking loans is so quick and easy and individual responsibility is downplayed (until the loan needs to be repayed of course), the family takes an additional loan of 6500 USD from FINCA to which FINCA adds 82% interest over the course of 5 years. They use the USD 5000 from abroad as an argument for their financial stability before spending it on various essential and less-essential ventures.
The family now owes more than 10,500 USD to FINCA (almost 6 years of full income). The monthly payment of USD 180 is already bigger than what the family can possibly make. So the family takes on an additional USD 10,000 of loans through various institutions because it is the only way to cover the credit. The family is now over 20,000 USD in debt or 12 years of income. Over the course of years, as the Japanese businessman and his wife discovers the situation and injects over 30,000 USD into the impoverished household.
Contrary to expectations, the household’s situation deteriorates further, taking on more debt. The standard of living which was supposed to increase stagnated at best: no running water, limited heating, occasional food shortages. And the more money is being injected, the more debt the family takes.
In this story both the businessman and FINCA are to blame to provide the family amounts that they clearly cannot handle. But once more, FINCA disguises those loans as a blessing and charity. It is also to be noted that the people who request the loans from FINCA and other microcredit companies are very far from honest. How could they be? They are either desperate because the loan is their means of covering another loan so they would say anything. Or they live in a delusion of magic money making them lose all sense of reality. In the above story, when left unchecked, the Kyrgyz family with 150 USD monthly income ended up living on a USD 1625 monthly expenditure which is just trailing the minimum wage of a country like France.
So how do we reconcile the two seemingly opposite points from the beginning of this section? How does FINCA achieve 97% of repaid loans, with interest? Simply because other banks are even less scupulous than FINCA with even fewer checks regarding the person’s ability to pay back. And even if those did not exist, loan sharks are willing to step in. Of course, not all credits are repaid using outside loans. They reverberate on other family members, usually children of the person who took the loan and those people abandon everything to pay them. If they succeed, there is no creation of wealth, no positive impact in local economic activity. The household is still where it left off years earlier, at best. In a nutshell, far from pulling people out of hardship, FINCA participates in a twisted trickle down of poverty on those who actually had a chance at life.
From FINCA’s point of view, the above paragraph is abstracted as details. All they record is a person who took credit repaying their loan. The convenient conclusion is that they run a flourishing business. And because of the culture of shame, few victims will disagree because they would need to admit their failures as a result.
FINCA in the west
Duvendack et al compiled findings of 58 papers on the impact of microcredit through field studies and randomized control trials. They conclude that [microloans] yield no convincing evidence on the positive impact of microfinance interventions on well-being.
The World Economic Forum warns against microcredit financial institutions lending to loan sharks who in turn lend to poor people [18]… who are already repaying loans from said institution.
Critics of microcredit often point out that health and education are particular sectors not helped by microcredit [19], in fact our experience shows that microcredit harms those sectors.
Does FINCA know?
We’ve established that FINCA presents a very different face to the west than it does to the impoverished regions it “supports”.
What is missing is to determine whether or not FINCA provides credit knowingly, because ripping off poor people is actually really profitable, or, is FINCA oblivious to the harm they cause, far removed in their offices in Washington?
On the surface FINCA appears to be an organization aimed at helping people in developing countries build businesses with microcredit. However, the truth is FINCA makes money by giving loans to destitute people, in developing countries, at exorbitant interest rates. The market research and finance department’s own data conclude that FINCA’s loans do not help their customers. In many cases, FINCA’s loans worsen the financial health of their clients. Despite knowing this, the directors continue to push the same products (loans) to vulnerable populations. — Anonymous source within FINCA
I got in touch with the media branch of FINCA to try to figure out their perspective on things but up to this day, they cautiously did not want to provide any information on the record.
It is however no secret that FINCA knows about controversies surrounding microcredit practices but do very little to address them. They are an old company with an even older CEO and like most old companies, they carry a lot of inertia. If it were publicly acknowledged that microloans do not improve people’s lives in locations where FINCA has its banks, the whole business model of “village banking” that FINCA is so proud of would have to be put in question. For FINCA, that would be an existential threat.
Dysfunction in communication, simple tasks can take an exorbitant amount of time due to bureaucracy.
There’re more nepotism here than in other similar organization.
Bigger issue is that the organization is fundamentally changing as it transforms to fully commercial operations and banking licensed status. The pressures of investors is dominating many decisions that previously were more immune from the need to earn returns on capital. — Glassdoor reviews
But there may be internal winds blowing the danger of inevitable change: if one day, all goes public, FINCA may have to choose between being a charity and being an for-profit financial organization.
While we can only theorize what the choice would be, in an hour long video recording of a FINCA panel [20], we learn that FINCA wants to move towards a self-funded model, which implies less relying on donations and ensuring their growth from the interest rates given to poor people. In other words, FINCA’s exit strategy would be to become a bank, which it arguably already is, under a thinning veil.
FINCA’s financial structure
Mapping a company’s financial structure is no easy task for someone not specialized in this and companies like FINCA don’t go out of their way to clarify things. This is the best picture I could come up with but take it with a grain of salt (disclaimer for possible lawsuits).
FINCA takes its money income from 3 sources:
- External donations via it’s own web page or its facebook page FINCA international. In fact, any individual can raise money for FINCA through a facebook fundraiser or donate through the donate button.
- Private Investment funds. In case of FINCA, these are 2 unnamed Dutch funds and one Swiss fund. I still have to confirm my suspicion that the Swiss fund is responsAbility investments headquartered in Zurich.
- Profits from high-interest loans as those previously discussed. Since FINCA has such a low default rate and such high interest rate, they beat virtually any index fund in terms of sheer interest and probably in terms of risk to reward ratio as well.
To illustrate how this work we can imagine the following scenario. Note again, that this is my understanding of it and I do not guarantee that this is exactly how it goes (disclaimer for possible lawsuits):
- A relatively rich Swiss investor (as swiss investors usually are compared to Kyrgyz standards) wants to ethically diversify their portfolio because their current broker openly invests in oil and military. They dig out “Responsability Investments AG” which only invest in ventures held by the poorest in the developing world. Not finding it one bit suspicious that the mess of thirld world countries provides steady positive capital gains, the investor commits the cash.
- The funds are channeled through FINCA towards one of its microcredit banks.
- A loan is issued quickly to a person in need, Almas from Karakol, Kyrgyzstan. Following the principles of village banking, the person is loan-shamed until they repay the loan, for example by taking another loan or by giving up their home to FINCA which sells it and pockets the appropriate part of the profit.
- FINCA pockets a portion of the profits, to be reinvested into the company, pay its employees salaries (when they don’t make them work for free [21]) and of course pay their leadership a bit more.
- The remainder of the profits is the return on investment which goes back to the investment fund.
- The swiss investor pockets the capital gains with a warm fuzzy feeling of having done something good for the world. Almas does not feel warm and fuzzy because it is -16 celsius in Karakol in January as he sleeps outside and the cheap vodka he could still afford only provides the illusion of heat.
What is responsAbility AG?
If you ever wondered how a responsible investment firm looks like, you can consult https://www.responsability.com/en/investment-products.
They provide loans to people in the eurozone who want to make ethical investments. The founder is an ex-Credit suisse banker and once you get passed the reassuring green socially responsible front page, the interface to choose investment funds is kind of similar:
I have not had time to push my investigation far enough to verify that the second fund is indeed the one that FINCA participates but it is so far my best guess.
Such a fund is described as
- Targets financial institutions that cater to micro, small and medium enterprises (MSME) which would match microcredit companies like FINCA
- Private debt financing with a focus on sustainable, successful and high potential agriculture value chain actors that stimulate local, regional and international trade which is vague enough to match pretty much anything.
The individual investor is hardly to blame. Everything is set up to reassure that this is the way we help the developing world. How could we possibly know the individual tragedies that lie beyond the curtain?
Alternatives
If microcredits are not the way, what is? More often than not, us in the west who are willing to help the struggling population of developing countries can only act through intermediaries like FINCA, organizations who we trust and which have a network of donations set up in a way that we feel comfortable with, explained in a language which is familiar to us. We will never know what happens with our money because we trust organizations like FINCA to be a force for good: that is why we empower them and rarely hold them accountable.
Myself being a frequent visitor of Kyrgysztan, I know too little of the alternatives. But as I was progressing with my investigation, I came across a woman running a crisis center in Karakol. The crisis center is a temporary place to stay for women and children who lost all, to the point of not having a roof over their heads.
The causes are various ranging from domestic violence to the very familiar issue of microcredits.
The shelter’s name is Ayara and it provides a temporary home for two weeks until a more sustainable solution is found, if it can be found. According to Ayara’s administrator, many families who cannot repay back FINCA’s loans end up losing their house by court order.
By the greatest irony, microcredit banks are well-funded enough (through our donations!) to forclose homes and evict people but centers who can pick up those poor souls don’t get a dime to provide heating.
The Ayara center is in a building provided by the Kyrgyz government. Victims come there and receive first care from me. The women can feed their kids and ask for a doctor. I want to help all but I only have 4 rooms and the building has no heating.
I get no funding from the state, I gather external donations by individually calling Kyrgyz people who work abroad, for instance in Dubai. — A. administrator of the Karakol Ayara center
I am still in the process of knowing about the center. In Kyrgyzstan, things are often not what they seem and one needs to vet good intent. But I understand already why it’s underfunded: despite making a difference where a difference is needed, the appeal to western charity is non-existant. Crowdfunding campaigns or facebook pages isn’t something which comes naturally in this part of the world.
Another, slower, less spectacular alternative is to fund education. The same way George W. Bush didn’t bring democracy to Iraq by bombing the hell out of Saddam’s kingdom, FINCA won’t achieve instant wealth by injecting lottery tickets with a visco fuse into a post-soviet economy. Even if a portion of the money funding microcredits would serve to promote schools and universities with an emphasis on promoting financial literacy, we could have a slow decrease of debt-related tragedies in Kyrgyzstan.
If FINCA would forgive loans which are de-facto impossible to pay instead of insisting on an 97% repayment rate which cannot be anchored in reality, then FINCA would be more careful in issuing loans and they would be issuing smaller ones.
Esther Duflo, nobel prize co-laurate 2019 emphasizes that microcredits do not start businesses [23] and doesn’t lift people out of poverty.
Instead, her “experimental approach to alleviating global poverty” focuses on the need to start small and constantly seek statistical feedback on the effect of the help which is provided. She emphasizes indirect help such as informing parents of benefits of education [22] in order to organically increase the impact.
But it is not just Kyrgyzstan which needs financial education, it is us too. Poverty is a hard problem, a far problem but a problem that we should not be so quick to delegate, we should try harder to understand or risk bad actors take advantage of us the same way they take advantage of the less fortunate. Maybe if one day, enough of us do their due diligence, someone can write A happy story of an successful shopowner once again.
sources:
- https://www.atlasobscura.com/articles/kyrgyzstan-future-photographs-ussr
- Based on oral recollection of a case in the Aksuu area, some details changed
- Based on a compilation of several oral recollections of a cases in Issyk-kol and Osh regions, details changed.
- https://rus.azattyk.org/a/kyrgyzstan-bank-credits/28956312.html?fbclid=IwAR2YZMBQpw0mzpWKQatLiFf0DINdpY6aurY_zeW2T4C__XkFU04HYX3Kyws
- https://www.microcapital.org/downloads/monitor_volume4/MicroCapitalMonitorPreview_Nov09.pdf
- https://en.wikipedia.org/wiki/Schroders
- https://www.blueorchard.com/contact/
- https://en.wikipedia.org/wiki/Ala_kachuu
- https://www.businessinsider.nl/china-phones-have-dial-tone-encouraging-you-to-make-debtors-pay-up-2019-5?international=true&r=US
- https://finca.org/blogs/customizing-financial-services-to-empower-women/
- https://en.wikipedia.org/wiki/Village_banking
- https://finca.org/wp-content/blogs.dir/1/files/2016/09/FINCA-2019-Form990_PublicDisclosure-1.pdf
- https://www.averagesalarysurvey.com/kyrgyzstan#:~:text=KYRGYZSTAN%20SALARY&text=Average%20salary%20in%20Kyrgyzstan%20is,is%20KGS%20932%2C729%20(Gross).
- https://www.youtube.com/watch?v=rk5l4qW7mro
- This is a tough one.Technically the argument I am making is a logical fallacy: https://en.wikipedia.org/wiki/Argument_from_incredulity#:~:text=Argument%20from%20incredulity%2C%20also%20known,or%20is%20difficult%20to%20imagine. However, it is supported by extensive experience and testimonies which have not always been recorded. It is also very difficult to get data on humane loans at scale because it involves huge loss of capital. So while this argument will be easy to dismiss by opponents of this article, I have strong intuition that it has more truth than what can be formally assigned to it.
- Story slightly modified for anonymity with strictly all meaningful details left untouched
- https://developmentevidence.3ieimpact.org/search-result-details/systematic-review-repository/what-is-the-evidence-of-the-impact-of-microfinance-on-the-well-being-of-poor-people-/9055
- https://www.weforum.org/agenda/2018/01/the-34-billion-dollar-question-is-microfinance-the-answer-to-poverty
- https://en.wikipedia.org/wiki/Impact_of_microcredit
- https://www.youtube.com/watch?v=9rYcTLqoIXE
- Employees “choosing to stay to work for free” in FINCA azerbaijan https://www.youtube.com/watch?v=knoy4wm1Xuk
- https://www.youtube.com/watch?v=0zvrGiPkVcs
- https://www.youtube.com/watch?v=OflduBvCrLQ