Comments on: Counterparties http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: najdorf http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/comment-page-1/#comment-10908 Thu, 07 Jan 2010 01:58:57 +0000 http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/#comment-10908 It’s certainly possible to do this sort of emergency assistance as a charitable operation. I’d be skeptical of any attempt to make a profit or return deposits while doing so, given the difficulties that allegedly highly-skilled bankers have had in turning a profit from lending to subprime borrowers at high rates with very cheap funding. I don’t think any church or other local group of charitably-minded individuals wants to be in the business of trying to collect delinquent debts or having to tell well-intentioned depositors that their money is gone. There also are significant legal obstacles and costs to setting up a small depository/lending operation.

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By: jian1312 http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/comment-page-1/#comment-10890 Wed, 06 Jan 2010 21:16:55 +0000 http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/#comment-10890 I wonder if there’s some sort of local, community-oriented option to payday loans. Say, churches or microfinance operations that can offer small loans to people in their community, but charge a reasonable rate like, 10%, instead of triple digit rate payday loan operators do.

The goal is not to make big profit, but to serve the community. It also doesn’t have to be charity, they can attract money from the same community by offering some return, like 5%, which beats putting money at checking or saving accounts. Am I being naive? Is this doable?

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By: Felix Salmon http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/comment-page-1/#comment-10864 Wed, 06 Jan 2010 14:19:23 +0000 http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/#comment-10864 Thanks, manoak. And nyetter, my question is whether there’s any evidence that the number or penetration of payday loans goes up as the availability of credit to the poor from more mainstream sources goes down. My guess is that in fact it’s the other way around: payday loan shops seem to thrive exactly in easy-credit environments. And similar lenders also pop up around microfinance institutions.

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By: manoak http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/comment-page-1/#comment-10832 Wed, 06 Jan 2010 08:44:01 +0000 http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/#comment-10832 Felix is not dumb.

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By: nyetter http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/comment-page-1/#comment-10829 Wed, 06 Jan 2010 05:47:18 +0000 http://blogs.reuters.com/felix-salmon/2010/01/06/counterparties-71/#comment-10829 Payday loan shops exists, there’s your empirics. Are you seriously that dumb?

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