Be a banker to the poor

JOEJOEJOE

DriftingByTheStorm wrote:

I'm gonna ammend this post to keep it short and keep the flames down.

1. I think it sucks that they only accept "loans" in the form of CREDIT CARDS.
It fucks the lender, by forcing them to MAKE INTEREST PAYMENTS on a loan, of which they receive NO INTEREST.

2. I think it is funny that YOU can not make any money, but the guy who is running this gets a salary. Infact, everyone on staff is getting paid, i imagine.

3. I think they would get a LOT more lenders if they would just charge even some token interest to these people. Say 3%

4. I think this system errodes the free market on some level.
If you think about it, for every person out there on this site getting a 100% subsidised NO INTEREST loan, there is another guy out there somewhere who didn't get on this site, who is trying his damnedest to get a loan like every other honest joe in this world, and HE IS NOW AT A SEVERE DISADVANTAGE because YOU gave the OTHER guy a FREE LOAN!

Just think about it.

Is THAT fair?

I dunno.

:(

Some people pay their credit cards off each month, and if someone prefers to pay with a check, they can simply charge the loan on their credit card, and then pay that same amount on their credit card right away.

I hope most lenders are smart enough to realize that they may never get paid back. This is more of a charity, so anyone who doesn't understand the giving spirit of the program, and insists on thinking of it as an investment, will just be disappointed.

Many charities employ full-time employees who get paid real-world salaries. Paying a skilled fundraiser is done in hopes of increasing donations to the cause, and it is the norm.

If someone feels the need to collect 3% interest on say a $200 loan, that would amount to $6 of interest income per year.

I, for one, would question the compasion of someone who would insist on collecting interest on one of these loans...that would be just plain selfish!

This is, in a sense, a charitable program, yet the form of the payment to the receipient helps them learn about business, and it prevents them from feeling as if they are accepting charity. This isn't like some kids asking their parents to fund their baseball card table at a swapmeet...these are businesses that will hopefully allow the owners to earn enough money to cover basic living expenses.

JOEJOEJOE

For those of you who question the program, and need to rationalize the "business sense" of it, just think, if the economies in the countries benefiting from the programs inprove, they may require less aid from the U.S., which would allow taxes to be lowered (in theory), which would put more money in your pocket (in theory).

DriftingByTheStorm

JOEJOEJOE wrote:

I, for one, would question the compasion of someone who would insist on collecting interest on one of these loans...that would be just plain selfish!

That's my point.
What is with you people?
THE BANKER IS MAKING 20 FUCKING PERCENT!
And if you don't read the fine print in the FAQ, you come off first glance thinking you are loaning FREE money to these folks. Which you are NOT!
And it is NOT a charity. It is a BANK MAKING 20% OFF OF YOUR MONEY.
THE ONLY PERSON GETTING CHARITY OUT OF THIS IS THE GODDAMN BANK
That is a FACT!
In fact it isn't even 20% at that point. From a cash on cash stand point it is an INFINITE RETURN.

I just think it is stupid.
If the banks want to lend money at 20% to these damned people, they have plenty of ways to get the money. They don't need you to shell it out on credit card.

And i wish you folks would stop explaining to me how a credit card works, and how to pay it off. I get that. Duh! But most folks who donate are going to leave this on their cards. Thats just the way the world is these days.

JOEJOEJOE

DriftingByTheStorm wrote:

That's my point.
What is with you people?
THE BANKER IS MAKING 20 FUCKING PERCENT!
And if you don't read the fine print in the FAQ, you come off first glance thinking you are loaning FREE money to these folks. Which you are NOT!
And it is NOT a charity. It is a BANK MAKING 20% OFF OF YOUR MONEY.
THE ONLY PERSON GETTING CHARITY OUT OF THIS IS THE GODDAMN BANK
That is a FACT!
In fact it isn't even 20% at that point. From a cash on cash stand point it is an INFINITE RETURN.

I just think it is stupid.
If the banks want to lend money at 20% to these damned people, they have plenty of ways to get the money. They don't need you to shell it out on credit card.

And i wish you folks would stop explaining to me how a credit card works, and how to pay it off. I get that. Duh! But most folks who donate are going to leave this on their cards. Thats just the way the world is these days.

I am confused.......which banker makes 20% ?

DriftingByTheStorm

JOEJOEJOE wrote:

I am confused.......which banker makes 20% ?

OMFG.
Someone [Hein. Helen?] posted a quote from the FAQ on the site.
I and others were wondering if this really was interest free money that users of the site were lending ...

Helen posted a relevant section of the FAQ :

Helen Posted This From The FAQ wrote:

If the Field Partner interest rate seems high, consider the following:

Field Partner interest rates are a highly affordable alternative to the local money lender


Local money lenders - often the only option for poor entrepreneurs to get a loan - charge interest rates ranging from 60% to 800% annualized.
A poor entrepreneur can generate greater benefits from additional units of capital than can a highly capitalized business, because she or he begins with so little.
According to the World Bank, studies covering India, Kenya, and the Philippines found that the average annual return on investments by microbusinesses ranged from 117 to 847 percent.
The costs of making a micro-loan in the developing world are higher versus larger loans in the West.


Cost of screening - Field Partners must screen entrepreneurs who commonly have no credit history, no collateral, are frequently illiterate, and often live in remote areas. To responsibly assess the credit worthiness of each entrepreneur, the cost is higher than the West where most everyone has a credit score and screening / loan application can be done electronically.
Cost of in person collections - Field Partner staff typically travel to each entrepreneur on a monthly basis to make collections. Compared to the West, where mail and internet repayments are standard, the costs are higher.
Cost as a size of the loan - If the Field Partner's actual cost per loan is $25, the percentage cost is 0.25 percent for a $10,000 loan, but 25 percent for a $100 loan.
Field Partners must charge an interest rate that allows them to pursue their social impact agenda sustainably.

You tell me.
Is it justifiable to run a site that, on the face of it this site purports that you are lending 0% interest money to these poor people ... but if you bother to read the FAQ, you see that SOMEONE ELSE is taking 20%?

You would think that what ever money is supporting this REGISTERED NON PROFIT site would also support the lending cost of YOUR LOAN ... but NO ... in addition to whatever money this site is pulling in to operate, they ALSO tack on a 20% fee to MOST loans that YOU give out.

SO YOU TELL ME.

WHATS GOING ON?

Look.
I don't care what you do with your money.
I'm just saying i don't like the way it's structured,
and its my right to voice my disagreement with the way the site "purports" to operate from a first glance perspective ... and the way the fine print spells it out ...

which is namely ... you think you are "giving" free loans to people, but the banker is charging interest on it.

Why fucking bother with the site then.
They are really that hard up for the loan origination cash?
Why not just ask bill gates for 200,000K or something?
Surely all the 25-$1000 loans ever processed through this site cant be much more than that. Fuck it. Just give em the cash. But fuck giving MORE money to bankers.

Sweet jesus, folks!

ONCE AGAIN.
IF YOU LEND ON THIS SITE
YOU ARE DOING NO ONE ANY GREAT "CHARITY" [EXCEPT FOR THE BANKER, HE THANKS YOU PROFUSELY FOR FOOTING BOTH THE COST AND THE RISK INVOLVED IN THIS LOAN]
YOU ARE SIMPLY FACILITATING A BANK IN EXTENDING A VERY HIGH RATE LOAN TO SOMEONE WHO DOES NOT NEED TO BE BORROWING AT 20%!

---

EDIT:

You know what.
Fuck it.
I CONCEDE.
If these people really are only getting offers of 100-800% interest loans,
20% is great!
Fine.
I guess to me it would suck.
But i guess it is the best the "civilized" world can do to help these poor folks.
It takes some white man walking across the scorched earth of zimbabwemizakistan to collect, and he has to do this and that to ensure that Chimichuri will repay her loan and that effort as a fractional percentage of the total tiny little loan is abormaly high compared with "conventional" western loans ... fine ... i get it.

Oh well.

GO AHEAD.
USE THIS SITE.
I APPROVE.

onelongsong

DriftingByTheStorm wrote:

I'm gonna ammend this post to keep it short and keep the flames down.

1. I think it sucks that they only accept "loans" in the form of CREDIT CARDS.
It fucks the lender, by forcing them to MAKE INTEREST PAYMENTS on a loan, of which they receive NO INTEREST.

2. I think it is funny that YOU can not make any money, but the guy who is running this gets a salary. Infact, everyone on staff is getting paid, i imagine.

3. I think they would get a LOT more lenders if they would just charge even some token interest to these people. Say 3%

4. I think this system errodes the free market on some level.
If you think about it, for every person out there on this site getting a 100% subsidised NO INTEREST loan, there is another guy out there somewhere who didn't get on this site, who is trying his damnedest to get a loan like every other honest joe in this world, and HE IS NOW AT A SEVERE DISADVANTAGE because YOU gave the OTHER guy a FREE LOAN!

Just think about it.

Is THAT fair?

I dunno.

:(

non profit organizations are a good scam. non profit means the business doesn't make a profit. the guy that started this can pay himself $100K/year (or whatever he wants) and it's ok. he can buy a car and deduct it along with many other things.
if my surgery goes well i'll be starting a non profit organization to rebuild a pony express stage stop. it will be a "museum" open to the public but it will also have a gift shop rented to my other business which is not non profit.
being a national historical site; the government will advertise everything i do. i currently charge $5.00 donation for those who want to come see the animals; feed them; and take pictures. while they're here; they usually buy product.

i do think the sites idea shows how the poor should be helped. if someone wants to help the poor; they have that option. the rich shouldn't be forced to help through taxes or by any other means.

sending your credit card information is the stupidest thing i've heard of in a long time. you should be able to send money orders to protect yourself from identity theft or fraud.

onelongsong

dunkman wrote:

it sounded really dodgy from the off... i'll continue with my monthly payments to Save The Children (from Helen) which i know goes somewhere good and i'm okay with not getting my money returned.


I didnt like to say yesterday, but i dont really agree with helping people set up businesses and stuff like that.. i dont have a business and i'm damn sure nobody would give me a interest-free loan to start one... also i'm helping a business owner get even wealthier (relatively speaking) than people who are perhaps poorer in that area.... meanwhile thousands starve to death in Africa every week.

its a case of who needs it the most for me, and in my eyes thats kids... hence my monthly payment above.

but each to their own

i agree. if the recipient is starting a non profit business to help others; like food distribution; i can see it.

what i don't understand is the people who complain about all the poor and starving in the us; then send money out of the country. WTF? why wouldn't you help your own countries economy? this would eventually help you and bring you closer to the things you would like to see. like socialized medicine.
look how strong america made japan by sending them american dollars. they thanked us by imposing a 100% import tax so we can't sell our goods there.

JOEJOEJOE

onelongsong wrote:

non profit organizations are a good scam. non profit means the business doesn't make a profit. the guy that started this can pay himself $100K/year (or whatever he wants) and it's ok. he can buy a car and deduct it along with many other things.
if my surgery goes well i'll be starting a non profit organization to rebuild a pony express stage stop. it will be a "museum" open to the public but it will also have a gift shop rented to my other business which is not non profit.
being a national historical site; the government will advertise everything i do. i currently charge $5.00 donation for those who want to come see the animals; feed them; and take pictures. while they're here; they usually buy product.

i do think the sites idea shows how the poor should be helped. if someone wants to help the poor; they have that option. the rich shouldn't be forced to help through taxes or by any other means.

sending your credit card information is the stupidest thing i've heard of in a long time. you should be able to send money orders to protect yourself from identity theft or fraud.

The govt does put non-profits under scrutiny....on their tax returns, they must list the higher-paid employees, and, they must show how much income they earned on activities unrelated to the purpose of the charity. They also must show what % of the donations received actually went to the actual charitable purpose.

onelongsong

JOEJOEJOE wrote:

The govt does put non-profits under scrutiny....on their tax returns, they must list the higher-paid employees, and, they must show how much income they earned on activities unrelated to the purpose of the charity. They also must show what % of the donations received actually went to the actual charitable purpose.

joe joe joe; ever hear of loopholes? since my other company is in my daughters name; i'm renting her about 200 sq feet. what she earns in the gift shop has nothing to do with my taxes. the donations are eaten up in maintaining the property. most are cash anyway. then we have initial start up costs. fencing will be about $20K and can be depreciated over 15 years. plus; this is money i loan the organization at 10% interest and must be repaid to me.
that's the tip of the iceberg but you get the idea.

sweetpotato

thanks hippiemom for posting this! i've read a few stories over the past year or so about this sort of thing, and it piqued my interest. i'm definitely going to look into it.

you rock, as always.

JOEJOEJOE

onelongsong wrote:

joe joe joe; ever hear of loopholes? since my other company is in my daughters name; i'm renting her about 200 sq feet. what she earns in the gift shop has nothing to do with my taxes. the donations are eaten up in maintaining the property. most are cash anyway. then we have initial start up costs. fencing will be about $20K and can be depreciated over 15 years. plus; this is money i loan the organization at 10% interest and must be repaid to me.
that's the tip of the iceberg but you get the idea.

Well, just because there is a loophole, do you feel justified in exploiting it?

There is nothing wrong with using ethics as a guide, as opposed to doing something just because you can get away with it.