[HN Gopher] Mexican Loan Apps, Extortion, and the Google Play Store ___________________________________________________________________ Mexican Loan Apps, Extortion, and the Google Play Store Author : blopeur Score : 154 points Date : 2022-08-14 13:49 UTC (9 hours ago) (HTM) web link (techpolicy.press) (TXT) w3m dump (techpolicy.press) | siliconc0w wrote: | It's a shame because I think there is a legitment use-case for | micro-lending but there needs to be regulation and enforcement. | Also asking for those kind of wide permissions should trigger | some kind of additional review - a scam-filled untrusted | ecosystem hurts all app developers. | wejick wrote: | This kind of scam was so rampant in Indonesia until the | government took strong stance, effectively sweeping the practice | across the country. It's like Google doesn't even care about this | things, in contrary they're so fast blocking and suspending app | submissions that against their bottom line, like digital goods | and payments methods. | nixcraft wrote: | These scams are going on in India too. Typically they offer | $100-$200 loans, and there is no legal framework. Victims are | afraid to go to the police. Even if someone goes to the police, | these apps are all running from China, and they can't do much | about it. From the BBC article: "The people running the apps | gained access to all the contacts on his phone and his pictures, | and have threated to send nude pictures of his wife to everyone | on his phone."[1] It is a horrible system, and Google doesn't | care about poor people getting scammed. Some victims even | committed suicide because of the threat of releasing their | private data. | | [1]https://www.bbc.com/news/business-61564038 | kumarm wrote: | Information related to Google Play and Indian loan apps here | seem to be driven by inaccuracies. | | Most of loan apps require users to download APK and side load | them. Google play removed a number of them from Play app store. | | What is the role of Google here? Make it harder to side load | apps in countries like India? I would think it raises more | issues than it solves. | josephcsible wrote: | When the apps in question are being sideloaded, Google | shouldn't be doing anything about it. The government should | instead, by freezing the accounts that the scammers want the | loan repayments to be sent to (or if the accounts are with | foreign banks, ban domestic banks and payment processors from | sending any money to them). | [deleted] | nikanj wrote: | It's interesting how popular Google products remain, | considering their well-earned reputation of Never Giving A Shit | rahimnathwani wrote: | "these apps are all running from China" | | I'm curious about this. Can you please tell us more? | nixcraft wrote: | The servers for these apps are in China, but the owners are | in other countries, Mexico, India, China etc. So it is hard | for police to get a warrant to shut down servers when | crossborder issues are involved. I am not an expert in such | crimes, but they make it hard for local police to shut them | down. | oefrha wrote: | If the government can ban TikTok and a bunch of other | popular apps overnight, surely it's not hard to get scam | apps removed from Google Play if they cared at all? | josephcsible wrote: | Wasn't the TikTok ban only effective because ByteDance | didn't try to evade it? | pdntspa wrote: | Interesting... I was under the impression that it was | hard to get hosting in China unless you have a chinese | company with the CCP's blessing | | So do they let foreigners set up hosting accounts in | China then? | bobkazamakis wrote: | are you asking what laws criminals are following? | pdntspa wrote: | No, I just thought the chinese government regulated | internet hosting very closely. Or implying that it is | also complicit in these schemes. | toast0 wrote: | Might be easier to get Chinese hosting if the traffic | doesn't go to China? | spaceman_2020 wrote: | Appreciate that the RBI is going tough on digital lending. | | The number of scammy, scummy app based lenders was getting out | of control. | vishnugupta wrote: | I came here to mention about situation in India too; so I'll | add on to this. | | Enforcement Directorate (ED) of India in a span of one week has | frozen bank accounts of two crypto companies on the charges | that Chinese lending apps were using them to move the money out | of India. First WazirX[1] a popular exchange and then Vauld[2]. | | [1] https://bit.ly/3PrKk5g [2] https://bit.ly/3djQ9V2 | jimmaswell wrote: | 1. Buy a cheap used phone+burner sim for $20 | | 2. Set up a fake Google account, nudes from Google image | search, and scammer numbers as contacts | | 3. Take these loans and wipe the phone or let them "hack" the | worthless phone | | 4. Profit as these people being out of reach of the police goes | both ways? | frostwarrior wrote: | And doing all this work for a $100 loan? | cowtools wrote: | It can be automated. And if it can't, there are armies of | people in the third world who can "automate" it for you, | like solving capchas. | | Also It's not a $100 loan. The insinuation is that it'a | $100 dollars that you take and run. | NullPrefix wrote: | $100, but you're also doing a good deed. | | Donating blood doesn't pay that well either, but people | still do it. | dspillett wrote: | A $100 take-and-keep is what I read. Each loan is worth a | lot more to the sharks than what a bank would get back from | anything similar, so the poster above would be taking | potential a lot more in "opportunity cost" from the | scammers unless they give in on collection very quickly. | [deleted] | notdang wrote: | They don't approve the loans automatically. They go through | your photos, social networks,calls, etc. to make sure it's a | real account. | cowtools wrote: | That can be easily faked. Seems susceptible to sybil | attacks. | User23 wrote: | Easily is relative. Any defense can be beaten. The | question is whether or not it's worth beating it. There's | no point in spending a million to crack a safe with a | thousand in it. Well, unless you just want to $%^& | whoever owns the safe. | londons_explore wrote: | It's surprisingly difficult to fake years worth of | conversations with family and friends... | | The loanshark can say "show me the conversation with your | boss. Show me the conversation with your mom.". They can | cross reference things between the person's memory and | the conversations. They can download all the | conversations and put them in a database so the same | conversation set can't be used to take out another loan. | | They can also call your contacts to confirm details - ie. | 'can you confirm Mary is your daughter? Does she have 2 | cats and a dog?' | bagels wrote: | They can do that, but are they actually doing that? | true_religion wrote: | They would do that if they needed because people were | spoofing the system. Or they would do what the | traditional banks are doing: avoid lending to people | without a proven track multi-year record, physical | location to monitor, and assets to hold as collateral for | a downpayment. | | However, I'm curious about one thing. Everyone who | suggest spoofing the system for the sake of privacy, do | you believe people who do that... will actually also | repay the loan they were given? Or would they just use a | fake name & commit fraud? | spaceman_2020 wrote: | Very sure that you can spoof all of the above with 2-3 | hours of effort. | Nextgrid wrote: | I wonder how much effort it would be to automate the | process of creating real-looking data (via AI or public- | domain data) and then watch the money roll in (or at the | very least DoS these scams enough that they can no longer | tell _real_ loan applications from all the noise). | duxup wrote: | This sounds like a sorta fun thing to try to pull off... | brundolf wrote: | New use for generative AI? | jeroenhd wrote: | Set up a bunch of emulators and you can do this at scale! | Should earn you a quick few thousand dollars before these | scanners catch up. | Zircom wrote: | You can already do this with the existing "loan" apps like | Dave or Brigit in the US. They're not legally loans and | there's no expectation or requirement to actually pay them | back, and they can't pursue you for it or send it to debt | collection. Just take out the "loan", call their customer | service line and remove your bank account, and that's it. | Free money. | | Dave Terms of use section 9.3: | | "However, Dave warrants that it has no legal or contractual | claim against you based on a failure to repay an Advance, but | Dave will not provide you further Advances while any amount | remains unpaid under the Advance Service. With respect to a | failure to repay an Advance, Dave warrants it will not engage | in any debt collection activities, place the amount owed with | or sell to a third party, or report you to a consumer | reporting agency. " | | Empower Terms of Service dated Dec. 8th 2021 Section "Empower | Advance" | | "We offer Empower Advances on a nonrecourse basis. This means | you have no unconditional obligation to repay any Empower | Advance. Consequently, we warrant to you that we have no | contractual or legal claim against you for an Empower | Advance, and we will not engage in debt collection | activities, place the amount advanced with or sell to a third | party, or make any reports to credit reporting agencies | regarding your Empower Advance. However, we reserve the right | to deny you access to Empower Advance if you (i) do not meet | the qualification requirements, (ii) request an excessive | number of Empower Advances in succession, or (iii) do not | repay the full balance of an Empower Advance. " | | MoneyLion Instacash Help Center - Instacash - " What happens | if I can't make my Instacash repayment?" | | " Remember that you have no obligation to repay any Instacash | advance you receive but you won't have access to additional | Instacash advances until you have repaid all of your previous | advances and related Tips and Turbo Fees. It's important to | know that when you miss a payment, we will continue to | attempt to repay your Instacash advance and any related Tips | and Turbo Fees from your eligible accounts as long as your | payment authorizations for those accounts remain active. You | can withdraw the payment authorizations on your accounts or | debit cards by following the prompts in the MoneyLion App to | remove the payment method or by contacting customer service | at customercare@moneylion.com, 1-801-252-4427, or at ML Plus | LLC, Attn Customer Service, P.O. Box 1547, Sandy, UT | 84091-1547. Please note: You must notify us at least three | (3) business days (business days are Mondays through Fridays, | excluding bank holidays) before your scheduled repayment date | to give us and your financial institution sufficient time to | process the revocation." | atlasunshrugged wrote: | Have you tried it? Very curious to know what happens in | practice if you try to do this | Zircom wrote: | I haven't personally, but know several people that run in | some of the same online circles as me that have with zero | issues. Most of them even went about 6 months taking out | and paying back advances on time just so the apps would | start lending them even more, and only once they got it | up to like $500 is when they'd take the money and "run". | vuln wrote: | 3. Dave reports your advance settlements to Equifax on a | monthly cycle. It may take up to 2 cycles for this activity | to be reflected in your credit history with Equifax. Terms | apply, see dave.com/extra-cash for more details. | Gordonjcp wrote: | > nudes from Google image search | | thesenudesdonotexist.com | | If that doesn't already exist someone needs to make it. | notjulianjaynes wrote: | It's redirecting me to a site that's down, but appears to | be associated with https://twitter.com/haremtoken | Gordonjcp wrote: | I mean I said it as a joke, but I can't say I'm surprised | it's a valid registered domain. | Biologist123 wrote: | As I understand it, the way these apps work is: | | 1. The loan interest rate is set relative to a base default rate | of a population sample of lenders. Therefore very easy to predict | capital return, but means interest rates are usually high to | cover high rate of defaults. | | 2. Defaulting loans are sold to local debt collectors for | collection, who presumably are quite ruthless. | | 3. There are a few companies which white label the software | needed to run this sort of scheme, so presumably the operator | only has to drop in capital. | | If you have further information on how these businesses work, | please respond! | nerdponx wrote: | The article also states that the apps deliberately obfuscate | the costs (50% fee deducted from the loan amount) and terms | (due in 7 days with 300% interest) of the loan. | xtracto wrote: | I built the system of reputale a Mexican startup that did | online lending, so I have some insight: | | 1. This is a real problem in Mexico: people complain about high | interest rates. However, for these kind of bullet loans , you | see 30% of default in the FIRST loan. And back when we were | starting on 2013-14 we had up to 70% of default due to fraud. | | So, with around 30% 1st default and about 15% 2nd default, we | created revenue models that considered that, CAC, cost of funds | and opex to define the interest rate... that very high APR | really was not making people rich overnight. | | See, one problem in Mexico is that defaulting in a loan is not | a crime, so theres legally NOTHING a lender can do to make you | pay if you decide not to. The only repercussion is that you | Credit Buro gets tainted, for 6 years. I've read of people that | get a $100,000MXN loan and then just change phones, move | apartments and wait for 6 years to clean their credit buro. | | 2. Default loans deffinitely are sold, for cents to the peso. | But usually only the ones that are very old. Now, there are | different types of collection agencies. Where I worked, we | tried to he very reputable so we only chose the least shady | ones. But in reality the only thing they could do is call you. | Even calling your provided references is illegal. We actually | stopped asking for references IIRC. | | 3. I dont know but dont doubt it. BUT, have a look at | Fineract/MifosX: an open source loan management system. Its | relatively easy to setup a lending operation using that. It's | pretty comprehensive. | | All in all, there are very shady app/online lending services in | Mexico. But it is nothing exclusive of the internet. Way before | this, you heard of lenders that would do "collections" by | getting some tough guys from prison (yup, in some prisons they | can get out for the day like nothing, for some cash) and | knocking at the debtor's door with baseball bats, wrenches or | any other hard weapon . If you didn't pay they broke your legs | or worse. | | That now it happens online is only the natural evolution of the | shithole that is my country, unfortunately. | ryandrake wrote: | > See, one problem in Mexico is that defaulting in a loan is | not a crime | | Nor should it be. Lenders like to conveniently forget: the | risk of default is the reason they charge interest. If there | was no risk of default, you couldn't really justify charging | much interest, could you? | | Issuing a loan is a business arrangement, and default is one | of several clearly defined ways of exiting that arrangement. | Lenders have been very successful in their attempt to smear | default as some sort of _moral_ failure. Like you 're some | kind of bad person for making a sensible business decision! | cornel_io wrote: | Is the US any different? I'm pretty sure it's almost | impossible to get a criminal conviction for bad debt these | days. Maybe in a really extreme case like a deliberate | fraud scheme that used defaulting as a key part of the | process, but not a normal person just normally not repaying | a loan. | londons_explore wrote: | To be vulnerable to this kind of extortion, there has to be | something about your life, true or false, that you'd prefer | people not say about you. | | I was thinking, and I don't think there is anything that I | wouldn't want said to my friends or family. | | Everything that could be said is either plainly untrue, or | wouldn't sufficiently bother me to change my behaviour. | | I wonder how other people get into positions where this isn't the | case for them? | pdntspa wrote: | > there has to be something about your life, true or false | | There are plenty of false things that anyone can say about | literally anyone, including you. If the lie is well-crafted | enough, good luck defending against it. | londons_explore wrote: | Perhaps give some examples? | | Everything I can think of is either easily demonstrably | false, or I just wouldn't care, because my friends and family | either wouldn't believe the attacker over my word, or because | it just isn't something that matters to me. | Nextgrid wrote: | I remember a quote that goes along the lines of "the amount | of effort to refute bullshit is orders of magnitude higher | than what is needed to produce it". | | They can essentially DoS you by spreading libellous | statements which will take lots of effort to refute and | encourage people to distance themselves from you as to not | become collateral damage themselves. | toast0 wrote: | I heard londons_explore has a secret repository of | PHP/Java(script)/Lisp/C(++)/Ruby/Visual Basic and doesn't | want anyone to know? | londons_explore wrote: | News to me! I guess it's so secret I've forgotten it! | | --- | | I guess that falls in the category of 'rumours of the | existence of a thing that doesn't exist and is | embarrassing'. Obviously it's very hard to disprove such | a rumour, but it is quite easy to just say "I don't care, | and you shouldn't either" as a response. | dymk wrote: | Be gay and live in most parts of the world | npteljes wrote: | One of these vulnerabilities is living in Mexico. From TFA: | | "He starts getting this very, very graphic images of | dismembered bodies. You know, real images probably taken from | those websites that have pictures from drug dealers and the | terrible things they do here in Mexico. | | So he's being sent this true, these real pictures. And of | course any Mexican will immediately get very scared, very | intimidating, thinking that organized crime is behind | something. You don't want to be their target. You start fearing | for your life. They have your address. They have information on | your children, your wife, he's very scared." | josephcsible wrote: | More proof that Google doesn't care about you: they ban call | recording apps from the Play Store but not apps like these ones. | xtracto wrote: | It's strange and crazy: back in 2014 I worked building what we | thought was a reputable online lending platform in Mexico. We | were the first online lender. And we were at least _trying_ to | do things right. | | Nevertheless, Google banned us from AdWords/Adsense: we could | not advertise our services even if people searched for the | company name. The list of banned businesses was: porn, | drug,guns and us... that's how "low" was the stance of the | business we were doing. | | Ff to this day it seems The Goog has seen good money in this | vertical , so that it turns a blind eye to fraud. | fzfaa wrote: | Why should they blanket ban loan apps? | josephcsible wrote: | They shouldn't blanket ban all loan apps, but they should ban | ones that steal all of your data when you open them, that lie | about their terms, or that consider extortion or defamation | to be acceptable debt collection methods. | tjpnz wrote: | Similar situation on YouTube. Posting historical footage of the | Apollo program nets you Copyright strikes while actual | criminals can livestream crypto scams with utter impunity. | prvit wrote: | This is nonsense though. Criminals livestreaming crypto scams | go through hundreds of hacked accounts every day, their stuff | is constantly getting taken down. | | It's just their incentive structure which is different than | that of the Apollo program footage uploader. | tjpnz wrote: | Except they're not all getting taken down. I've observed | multiple fake Elon Musk/SpaceX accounts with histories | going back months. | Nextgrid wrote: | > go through hundreds of hacked accounts every day, their | stuff is constantly getting taken down. | | YouTube has very advanced image & voice recognition | technology that is very efficient at flagging (and | demonetizing) certain content merely based on trigger words | (terrible for science channels that show | fire/explosions/etc even though there is no violence | involved). | | If crypto is such a popular target, maybe introduce an | extra verification step (that requires uploading ID/etc) to | whitelist channels for crypto-related content, and any | other channels that have not done the verification (because | they don't plan to upload crypto content) can't upload | anything that matches those words? This would at least | prevent non-crypto-related channels from being hacked and | suddenly starting a crypto scam livestream. | | The reason it's not done of course is because Google bears | no liability (despite promoting these scams in the | "recommended" section) and the scammers & victims still | generate "engagement" and watch ads. | prvit wrote: | >YouTube has very advanced image & voice recognition | technology that is very efficient at flagging (and | demonetizing) certain content merely based on trigger | words (terrible for science channels that show | fire/explosions/etc even though there is no violence | involved). | | Or perhaps the technology isn't that advanced, and | cryptocurrency scammers have stronger incentives to work | around it than legitimate channels? | throw_m239339 wrote: | I remember during the PS5 reveal stream, Youtube was | recommending me crypto scam live streams promising free PS5 | and Youtube was taking down none of them. Youtube was | actively recommending me scams, I don't care how flawed | their recommendation algorithm is, it was unacceptable. | leach wrote: | Be aware of other scams too, some women are sending nudes to | people and screenshoting theirs in hopes of extorting. | | Really have to just stay frosty all the time now. | CharlesW wrote: | "Sending nudes" is the "committing private keys to a public | repo" of dating. | leach wrote: | Yep, pretty much. Crazy what some people will do to just not | work a regular job. | xtracto wrote: | Tangentially related to part of the text in the article : A lot | of these and other apps ask you to share documents, camera, mic, | gps, and other access from your phone . The problem is that | several of those wont work if you reject that access. Even worse, | Mexican government passed a law that made it compulsory to | monitor your GPS position for Banks and other money related | companies, so doing relatively common bank transactions require | you to lose your privacy. | | Given these blatant privacy violations, I wish mobiles had the | option to "mock" data for those sensors. Share files? Sure, give | access to a jail like bkank file system. Share mic? Sure, give | access to a white noise generated stream, same with video/camera. | Share gps? Give some mock location, etc. | | That's what a privacy enabled device would do. | | I wonder why hasn't this even been implemented at the browser | level. | airtonix wrote: | yeah, just launch a android virtual machine. | metadat wrote: | Won't work for any bank apps which require a passing check | through the phone cryptographic integrity chip. | User23 wrote: | Isn't this standard for educational software too now? My | understanding is you can't take a test remotely unless it's on | a rooted system. | _HMCB_ wrote: | GPS position sharing is a little frightening isn't it? I mean, | if some of these apps are cartel or organized crime related, | this could become a real physical threat. | bornfreddy wrote: | Afaik this is what MicroG does, though their aim is different. | They mimic Google services responses so that the apps work | without G proprietary libraries and services but I don't think | privacy is their stated goal (I'd love for someone to correct | me if I'm wrong, not using MicroG myself). | leaflets2 wrote: | I wonder if then the politicians would make it illegal to fake | one's GPS location or just have the ability to fake it | donohoe wrote: | It references this story which to me is very troubling: | Contreras told the story of one woman who fell victim to | these schemes named Maria. After Maria took a loan, agents | for the app iFectivo sent her 13-year-old daughter, her | cousin, her nieces, and more than a dozen of her other | contacts a picture of a nude woman with her face | photoshopped on. iFectivo told her contacts she had become | a prostitute to pay her debts. | | Full story (referenced in TechPolicy article): | https://restofworld.org/2022/mexico-scam-loan-apps/ | | Troubling, unethical, illegal stuff. | api wrote: | Stuff like this is what disabused me long ago of extreme forms | of libertarianism. Most libertarians and also some defund the | police types on the left are just woefully naive about what | monsters people can be. Turns out we need a very active police | force and regulatory state or people will almost literally eat | the vulnerable. | fzfaa wrote: | What calls my attention of this story is that employees of that | app would go through the trouble of creating a credible shopped | image of her and sending it to all of her contacts. Do they | have almost no clients, was the loan particularly big, do they | have loads of employees just to do this...? | jasonwatkinspdx wrote: | These scams are run as boiler rooms, where everyone is | working on commission. Actually my understanding is it's a | bit more of a pyramid scheme, where the senior folks get a | cut of everything, closers get a cut from openers, etc. | | But anyhow, point is these scammers are often motivated to go | to considerable effort, because the ultimate prize is a | pretty big cut of someone's life savings. But of course only | a few ever achieve that. The rest will just try for a while | then churn out, while the ultimate owners count their money. | thatguy0900 wrote: | It is not hard at all to create a credible head swap photo | shopped image. Probably a one man job to do it to everyone | they want to do it too. | bornfreddy wrote: | With ML, it can be (unfortunately, in this case) automated. | One victim - lots of work. Thousands - almost the same | amount. | IncRnd wrote: | Clearly, that is the leverage the lenders have over their | clientele, instead of credit reporting or asset seizure. | duxup wrote: | I wonder if there is a personal aspect to this, not just | being scammers but also kinda creepy people / maybe already | familiar with harassing people/ know people who will do it | for them. | nyolfen wrote: | alternatively, it was just a real photo from her phone | toxicFork wrote: | It was just the next jira ticket | AlbertCory wrote: | While there is plenty of room for doubt about micro-lending (see | [1] which I hosted, by Hugh Sinclair, a guy who's actually been | there in the field), I don't think it's fair to call these scams | "micro-lending." Maybe they're taking advantage of the favorite | PR that micro-loans get. | | In the micro-lending plans that Oxfam and other legit charities | back, borrowers meet in person with the lenders, and no hounding | takes place. Most of them pay their loans back promptly. | | However, the stories about "poor woman buys a sewing machine; | lifts her family out of poverty" are mostly just feel-good PR to | milk the donors. More often, they buy a stall in the market to | sell produce, and there's only so many stalls the market can | support. | | The real scandal of micro-lending, as Hugh explains, is that the | interest rates are scandalously high, and the lenders are mostly | using it as a way to buy SUVs and milk the First World donors who | want to feel good. | | These scams are _not_ "micro-lending." | | [1] https://www.youtube.com/watch?v=rhdZ2RfmiXo | lupire wrote: | syntaxing wrote: | 100% serious question, does iOS prevent this? Or is the | demographic of iOS vastly different? | duskwuff wrote: | Apple does allow personal loan apps, but sets limits on | interest rates and repayment deadlines (<=36% APR, >=60 days) | which effectively ban the type of app at issue here. Requesting | permissions to all of the user's contacts and photos in a loan | app wouldn't pass review, either, and the fact that Apple | doesn't permit sideloading is an effective block against the | "subway flyer" tactic. | netr0ute wrote: | If you are getting a quick, small loan in Mexico, you probably | don't have an iPhone because they cost multiple times as much | as an Android one. So, it's not worth it to make these apps for | iPhone users because that demographic is totally the opposite | of what you want. | xtracto wrote: | I dont know why you are being downvoted. I know what You | wrote is fact. I worked building the systems of such an | online lending company in Mexico, and I had to _fire_ my only | iOS developer because we saw we dint have enough demand in | those devices. | | Shootout to Jesus, the iOS developer & DJ. He was such a | great guy to work for, and really killed me to let him go. He | is a great guy :) | photochemsyn wrote: | The whole microloan program has been hyped for over a decade now, | but as this story shows, the outcome more often than not has been | more like mafia loansharking than actual economic development | under the entrepreneurial free-market model. This can be | explained via the notion that "enterpreneurs without lawyers end | up getting screwed over more often than not" and the people who | get these microloans just can't afford to hire lawyers to protect | themselves. | | While it's a right-wing trope, the microloan program has been | heavily promoted by the likes of the Soros-Omidyar crowd, with | the typical humanitarian patina covering what's really just | predatory capitalism: | | _" We have seen what microloans can do at the individual level | and are excited about bringing that same opportunity to small and | medium businesses," said Jim Bunch, Director of Investments at | Omidyar Network._ | | Here's another expository write-up of the phenomenon, in | Cambodia. Looks very similar to India, Mexico, etc. | | https://www.aljazeera.com/economy/2019/8/6/cambodias-micro-l... | | [edit] for more on background on this global trend and its | origins (2007) | | > "Microcredit is the newest silver bullet for alleviating | poverty. Wealthy philanthropists such as financier George Soros | and eBay co-founder Pierre Omidyar are pledging hundreds of | millions of dollars to the microcredit movement. Global | commercial banks, such as Citigroup Inc. and Deutsche Bank AG, | are establishing microfinance funds. Even people with just a few | dollars to spare are going to microcredit Web sites and, with a | click of the mouse, lending money to rice farmers in Ecuador and | auto mechanics in Togo... Wealthy philanthropists, banks, and | online donors aren't the only ones fascinated with microcredit. | The United Nations designated 2005 as the International Year of | Microcredit..." | | https://ssir.org/articles/entry/microfinance_misses_its_mark | unknownaccount wrote: | The micro loan system works fine in USA & countries that | actually enforce laws against extortion. I've gotten close to | 0% interest rate instant loans for $100- $200 with Dave, | Earnin, and MoneyLion. Been in the red for many months and | never received even 1 threatening phone call, text, or letter. | These apps saved me in a pinch and had seemingly no downside. | AlbertCory wrote: | Whatever else it is, it isn't new. | | The Grameen Bank in Bangladesh was first publicized in the West | 20 years ago. | | It also isn't "predatory capitalism." Rather, it's NGO-ism. | It's charitable donations from liberal-minded people that drive | it. | photochemsyn wrote: | Every time I hear these notions of well-meaning billionaire | philanthropists set on making the world a better place, I'm | unavoidably reminded of this short passage in Conrad's Heart | of Darkness: | | > "It appeared, however, I was also one of the Workers, with | a capital--you know. Something like an emissary of light, | something like a lower sort of apostle. There had been a lot | of such rot let loose in print and talk just about that time, | and the excellent woman, living right in the rush of all that | humbug, got carried off her feet. She talked about 'weaning | those ignorant millions from their horrid ways,' till, upon | my word, she made me quite uncomfortable. I ventured to hint | that the Company was run for profit." | | If it was real philanthropy, the model would be one of no- | strings-attached grants, delivered via a competitive process | open to people in disadvantaged communities - not a model | based on loans which must be repayed with interest, with | collection agencies lurking in the background to go after | defaulters in this manner. | | This is why people are better off cutting deals with the | hard-nosed businesspeople who spell out risks and conditions | upfront, rather than the liberal do-gooder snake-oil | merchants with their ulterior motives. | AlbertCory wrote: | I'm reminded of Mrs. Jellyby in _Bleak House_ , myself, but | yeah. | | The original idea of Grameen Bank was a circle of poor | people (all women, usually) who jointly promise to each | other to repay the loans. The fact that it's a loan, your | friends are monitoring you, and you have to pay it back | means that you have to take it seriously. It was hard to | argue with that, 20 years ago. | | Over time, though, it's morphed into "Big Western | philanthropic institution sweeps in, spends 24 hours, | leaves, and writes a check. Then the locals hire more staff | and buy another SUV." | [deleted] | sandGorgon wrote: | > _Last year, a Reuters investigation by Rina Chandran found | dozens of lending apps in India that appeared to violate Google's | policies against short-term loans_ | | just FYI - this is contrary to the product and the law of India. | Google is not the regulator. | | For example Manndeshi foundation runs 24 hour loans for women | vegetable sellers - who take a loan in the morning and pay back | at night. | | Google Play "ethics" is US-centric. It does not take into account | the realities of the local demographics. for example sub 90 day | loans are illegal on Play - a lot of microfinance in | India/Bangladesh is sub 90 days. | | What ends up happening is demonisation of everyone not playing by | Google Play's rules and gets termed as "predatory". ___________________________________________________________________ (page generated 2022-08-14 23:00 UTC)