2357911131719 said: The more obvious reason is that microcredit is seen as a charity while payday loans are seen as a business; there’s a lot more willingness to assume good faith in the former than the latter
right, but microcredit interest rates are really high! the perception may differ, but are they actually different in practice?
I thought the idea was that microcredit was used as an investment to start a business, while payday loans are consumption smoothing to help you get by.
hence the original point that in the developed world it’s almost guaranteed that any business you try to start with a payday loan will be illegal due to contravening one regulation or another, and that’ll get you a stranglin’
in impoverished areas you can just buy a goat and sell the milk or try to exploit arbitrage opportunities by buying stuff here and selling it there, and while you may face a number of challenges including unofficial corruption the state is generally weak enough that it won’t immediately shut you down.
I think it’s more that anything that’s not illegal is already being done much better than can be done with such a small amount of capital.
That’s one of the other major reasons. A lot of things can be productive, but not productive *enough*.
