Questions on microcredit

[Die Neue Zeit]

From my gleanings, there are three approaches to microcredit: the charity option, the "Kiva" option (the money isn't "sunk" in business terms unless the recipient defaults), and the "EBay" option (you're actually an investor in securities dealing specifically with microcredit).

1) To what extent can microcredit "modernize" the developing world in terms of capital accumulation (keeping in mind that most of this stuff is aimed at propping up individual petit-bourgeois and their "small businesses")?
2) Does the individual lender all of a sudden become a petit-bourgeois by participating in the microcredit process, even if in all likelihood the microcredit amount is nowhere near his or her employment (and possibly non-management, as well) income?

[Lynx]

2) In Kiva, the individual lender does not see profit, only the principal is returned. If the principal is consistently re-loaned (which is the goal), those funds act as capital pools. Interest is collected by the field partners.

[Raúl Duke]

I hope they cover this in economics class (maybe I should just ask my teacher) so I can understand this obscure thread about the micro credit concept

[Die Neue Zeit]

Originally posted by [email protected] 25, 2007 02:09 pm
2) In Kiva, the individual lender does not see profit, only the principal is returned. If the principal is consistently re-loaned (which is the goal), those funds act as capital pools. Interest is collected by the field partners.
Perhaps a new aspect of the word "capitalist" can be added?

Say some working-class person won a multi-million-dollar (after-tax) lottery, and then for some reason diverts say, half of the proceeds to Kiva specifically, earning no interest. Perhaps this guy has become a capitalist now, even if he himself doesn't earn a single cent of profit, no?

Then again, what about those who "invest" in the startup of non-profit organizations (from political think tanks to charity groups), like the couple who created Kiva in the first place?

[Lynx]

I would describe it as an act of philanthropy, where the lender does reserve the right to withdraw their capital investment (assuming there were no defaults).

Most of the loans on Kiva are formed from collective capital pools.

How about 'proxy capitalist' with recognition that the investor is accepting zero return or interest on their investment?

Question: is an investor equivalent to a lender?

[Die Neue Zeit]

Originally posted by [email protected] 26, 2007 01:09 pm
I would describe it as an act of philanthropy, where the lender does reserve the right to withdraw their capital investment (assuming there were no defaults).

Most of the loans on Kiva are formed from collective capital pools.

How about 'proxy capitalist' with recognition that the investor is accepting zero return or interest on their investment?

Question: is an investor equivalent to a lender?
You're getting me thinking on the "proxy capitalist" term. It isn't a new class, per se (not many "persons" can afford to accept zero return or interest on their investments or notes/loans/bonds receivable, respectively, unless you happen to be a Japanese bank :lol: ).

In regards to your question, no. Both are different types of capitalist ("equity" capital versus "long-term debt" capital).