John & Belle Have A Blog

90% Interest Rates Draw Lenders

This is an interesting article in the NYT about a microfinance lender in Mexico that is a for-profit, publicly traded company. You always hear in discussions of charity microlending that the default rates are incredibly low. Special measures are taken, such as lending almost exclusively to women and having the women form groups whose loans (and defaults) are pooled. And obviously, the transaction costs on making many small loans would have to be much higher than fewer, bigger loans. Nonetheless, I always wondered why the market didn't attract for-profit lenders, if the repayment rates were really so good.

Well, in this case it has. The non-profit lenders, and the man who came up with the idea, economist Muhammad Yunus, are opposed to the encroaches of for-profit companies that will be run for the benefit of their investors. As long as the for-profit lenders don't get the government to lean on their idealistic competitors it seems to me it would be all to the good--the funds of "ethical" investors can be put to work in underserved markets, and the original, non-profit orgs should be able to offer better rates in areas where they compete.

As I typed this entry, I wondered, do these organizations ever get protested against on gender fairness grounds? "You dickheads will just drink up the money" isn't a very conciliatory response, even if it's well-founded...Desultory googling yields this possible link between access to microfinance and becoming the victim of domestic violence for women in Bangladesh, but that wasn't exactly what I was thinking of. Except insofar as I was thinking about dickheads. The microfinance discrimination far exceeds anything like variable rates for car insurance; from everything I've read they just basically don't loan money to men. This may not result in serious injustice to the male would-be entrepreneurs as a class if men have access to traditional sources of credit closed to women in a society, but it could still be pretty unfair in any given case. It strikes me that the sort of people who would strongly object to this are the same people who would laud accurate, dispassionate risk assessment in other financial areas, but making up imaginary political opponents with contradictory views is unseemly, so I'll stop there.

UPDATE: mere seconds later, I am moved to ask, day-um, what's in that cheese? That looks gooood.  Mmm, mysterious queso.

If It Wasn't For Bad Luck

UPDATE: just skip to the bottom where I encourage you to go help Gary Farber out. This is a boring story, except for the minor car accident.

Today just hasn't really been my day in some ways. I walked down to the bank machine to get cash for a taxi to Orchard road. I wanted to go to the Apple store to get a new cable for my iPod (we lost ours in the US somehow, despite (because?) not taking it out of the bag ever). So, the cash machine sucked my card in and then...nothing. More happy ads for DBS products, more 'please insert your card.' It was trying to pretend nothing even happened between us! OK, so I went inside and convinced them to cancel my card even though I didn't have my passport with me (which was nice of them). They would have given me a new one had I known my passport number, and I could have called home for it, but then I realized that my passport number has changed since I opened the account. I have to go back with my old as well as my new passport. Sure hope I can lay my hands on that expired passport! I know I wanted to save it because it has lots of cool stamps, so it's...around (fateful words of doom in my house).

OK, I got money out of another account and got in the cab, and I asked to be taken to Liat Towers taxi stand, which was a clever, insidery thing to do since if the driver leaves you there he isn't forced to enter the central business district and pay the toll (deducted automatically as you pass under the gantry). Thoughtful, right? But then the driver went the wrong way, going around by River Valley Road, which defeated the whole point. So I asked him to leave me at the Grange Road side of Wheelock Place, which is actually illegal, but whatever. There was another taxi pulled up there with someone getting in, and moments after I unhooked the seatbelt we got into a pretty severe fender-bender with the other cab which attempted to pull out as we were trying to pull in ahead of him. Lots of scraping and crunching, but not much bonking my head on the seat back, so that was good. The driver took my number, but I hope he doesn't call to have me confirm his side of the story, because he was frankly 50% at fault.

Blah blah blah (god I sound like James Lileks; "then the girl at the McDonalds said something irritating and I thought about how in the fifties she never would have said anything like that, and there woudld have been glass bottles of coke, and then I went home and microwaved a hot pocket, and...") got my cord at the Apple store, after drooling over a $4000 monitor. "iPod dock connector to firewire" it's called. Sounds promising, no? The cashier pointed out it was a firewire cable. "Yes, yes it is," I proffered calmly. I think we can all see where this is going. When I plugged the iPod in it said "firewire is not supported. To move files please use the USB cable included." What? There's no other thing this damn cable is for but to connect my 3 month old iPod to the iMac via a (lovely, unoccupied) firewire port. Is this some DRM bullshit? I mean, yes, a USB cable was provided originally. But so? Arrgh.

However, actually my life is awesome, and I live in a great apartment with my beautiful family and have enough money to be worried about my computer peripherals, so in the grand scheme of things this wasn't, in fact, a bad day at all. Gary Farber, on the other hand, is going through a real rough patch, so any John and Belle Have a Blog readers who have made it to the end of my drivelling complaint please think about kicking him some dough.

Happy New Year!

Thanks, whoever ordered four spanking new LaCie terabyte drives! (I'm assuming one person bought all four. What do you need that space for, mystery reader?) Thanks also to the new owners of various moderately pricey DVD collections. Our little Amazon fundraiser has now raised US $338 + the $100 Belle and I donated. Plus guestimated stuff to ship. I hope we manage to hit $1000 by Feb 1. That would be a very handsome sum.

Give generously to the charity of your choice. When you are done: if you were going to buy anyway, consider buying through our handy Amazon search box. Help those in need. Tonight I was very proud to write out a check to the Singapore Red Cross for $S850.00 (US $518.)

Cute kid pics under the fold. Ours are happy and healthy. This New Year we are grateful for that blessing.