WEBVTT - Could microlending develop the world? 0:00:00.240 --> 0:00:02.880 Brought to you by the reinvented two thousand twelve Camray. 0:00:03.120 --> 0:00:07.480 It's ready. Are you welcome to Stuff you Should Know 0:00:08.080 --> 0:00:16.480 from House Stuff Works dot Com? Hey, and welcome to 0:00:16.520 --> 0:00:19.759 the Josh and Chuck Electric freak Out featuring the Matt 0:00:20.560 --> 0:00:24.200 guest producer Mad and standing in. You may also know 0:00:24.280 --> 0:00:26.840 it as Stuff you Should Know Matt of Lions and 0:00:26.840 --> 0:00:32.040 Scissors and Playing Soon. They have a MySpace page Red Chuck. Yeah, 0:00:32.120 --> 0:00:34.240 we plugged it before. Yeah, so we're not doing again, 0:00:34.800 --> 0:00:38.720 which I think we just did that, buddy. That's all right, Chuck. Um. 0:00:38.760 --> 0:00:40.519 I don't know if you're paying attention or not, but 0:00:40.640 --> 0:00:44.040 the United States pretty much dominated the twentieth century and 0:00:44.080 --> 0:00:47.839 every way you can see what USA USA exactly that 0:00:47.960 --> 0:00:51.480 that was chanted quite a bit. Remember Rocky Oh yeah, 0:00:51.640 --> 0:00:54.840 beat the Russian guy? Yeah? Um that was just one 0:00:54.880 --> 0:01:00.600 accomplishment of minute four five Rocky four right. Um? So yeah, 0:01:00.760 --> 0:01:04.560 we we uh successfully fought just about every war we 0:01:04.640 --> 0:01:09.800 engaged in. Our economy just thrived. Did you know that 0:01:09.840 --> 0:01:12.800 the per capita GDP and nineteen hundred for the United 0:01:12.840 --> 0:01:17.080 States was four thousand, ninety six dollars? Not bad by 0:01:17.959 --> 0:01:20.600 nine It was nine thousand six hundred seventy one dollars 0:01:21.040 --> 0:01:23.200 doesn't seem like that much of an increase. I think 0:01:23.200 --> 0:01:27.119 about the population increase. So actual g d p UH 0:01:27.120 --> 0:01:30.520 in nineteen hundred was twenty eight point six billion dollars. 0:01:31.440 --> 0:01:36.880 In nine it was nine point to six eight trillion dollars. Yeah, 0:01:36.959 --> 0:01:40.120 So basically we rocked the hissy during the twentieth century. 0:01:40.200 --> 0:01:44.640 Right now it's two thousand nine. We're engaged in land 0:01:44.640 --> 0:01:48.440 wars with insurgent groups in Iraq and Afghanistan, and I 0:01:48.480 --> 0:01:53.720 guess you could replace engaged with mired maybe. Um, the 0:01:53.720 --> 0:01:57.880 the dollar is being abandoned or considered being abandoned as 0:01:57.920 --> 0:02:01.000 the universal currency in favor of a back skit of currencies, 0:02:01.680 --> 0:02:05.800 which spells trouble at cornucopia. Yeah, that's another way to 0:02:05.800 --> 0:02:09.000 put it, buddy, uh. And our housing market caused a 0:02:09.200 --> 0:02:14.359 worldwide financial collapse, so America is not quite as bright 0:02:14.000 --> 0:02:17.240 as we used to before. We get tons of emails 0:02:17.240 --> 0:02:21.480 saying it wasn't just that it was um with it. 0:02:21.639 --> 0:02:23.560 So this is this has caused a lot of people 0:02:23.560 --> 0:02:27.000 to wonder whether the turn of the twenty one century 0:02:27.080 --> 0:02:30.360 was actually the end of the American century, you know, 0:02:30.440 --> 0:02:33.880 especially with the rise of Brick, Brazil, Russia, Indian, China, 0:02:34.240 --> 0:02:38.519 and specifically India and China. Their enormous development has made 0:02:38.560 --> 0:02:41.600 people think, well, China is the next United States. Right, Well, 0:02:41.639 --> 0:02:45.080 I know everyone always thinks that it's hard to not 0:02:45.160 --> 0:02:49.120 be in the moment and realized that the greatest civilizations 0:02:49.160 --> 0:02:52.160 always fall at some point. Sure, it's gonna happen. I mean, 0:02:52.200 --> 0:02:55.000 it may not be anytime soon, but fast forward a 0:02:55.000 --> 0:02:57.960 thousand years and America might be a barren waste land 0:02:58.080 --> 0:03:01.320 like the Matrix or something was there? Was it a 0:03:01.320 --> 0:03:03.320 barren waste lane. I don't remember when he showed him 0:03:03.320 --> 0:03:05.960 on TV and it was this, you know, destroyed Madison 0:03:06.800 --> 0:03:13.639 with the general consent. This is the real world, that's right, Yeah, yeah, yeah, yeah. Anyway, Um, 0:03:13.680 --> 0:03:16.200 but we'll well, we'll have our day. I say, I'm 0:03:16.200 --> 0:03:20.000 with you. I say that the United States century, the 0:03:20.040 --> 0:03:23.040 American century, is not over yet. I agree. And the 0:03:23.080 --> 0:03:25.960 reason why is I think that during the twentieth century, 0:03:26.200 --> 0:03:30.359 the American dream this this idea that everyone has an 0:03:30.360 --> 0:03:34.640 equal shot at um pursuing his or her own goal 0:03:35.240 --> 0:03:38.560 under the free market capitalist system, which is not true, 0:03:38.560 --> 0:03:40.960 but it's a nice thought, I think. But I think 0:03:41.000 --> 0:03:43.840 that thought the American dream, whether it's possible to realize 0:03:43.840 --> 0:03:47.960 it or not, was so successfully packaged that it was 0:03:48.000 --> 0:03:49.880 able to be exported to the rest of the world. 0:03:49.880 --> 0:03:51.760 That kind of caught up. Have you ever heard of 0:03:51.760 --> 0:03:55.800 Thomas Friedman's Golden Arches theory of conflict prevention didn't have 0:03:55.800 --> 0:03:57.880 to do with McDonald's. Yeah, then I have heard of it. 0:03:58.080 --> 0:04:00.720 So yeah, the the the back four I think the 0:04:00.760 --> 0:04:05.240 Balkan War, uh no, two countries that both had a 0:04:05.320 --> 0:04:09.920 McDonald's engaged in armed conflict against one another after the 0:04:09.960 --> 0:04:12.800 point that both of them had the McDonald's until until 0:04:12.840 --> 0:04:16.400 the Balkans because they were pretty stoked about their fries 0:04:16.440 --> 0:04:18.240 and their big Max. You could say that. You could 0:04:18.279 --> 0:04:21.560 also say that cause correlation does not prove causation. But 0:04:21.640 --> 0:04:23.840 still it's pretty interesting and it makes a good point 0:04:23.920 --> 0:04:26.040 that it's a symbol actually more than anything. It is 0:04:26.360 --> 0:04:28.360 just like a coke machine. Like you can find coke 0:04:28.440 --> 0:04:32.640 machines in the most remote countries areas of the world, 0:04:33.120 --> 0:04:36.120 and you can say that that's basically your exporting democracy 0:04:36.200 --> 0:04:40.040 through successful capitalism, right, happy juice. That's also going on 0:04:40.200 --> 0:04:44.560 right now, that that continued export um with this thing 0:04:44.600 --> 0:04:47.640 called micro lending that's the longest s up we've ever done. Yeah, 0:04:47.640 --> 0:04:51.200 but dude, it was good. Yeah, micro lending is pretty cool. 0:04:51.200 --> 0:04:53.760 It's a good article, dude, Thank you, well done. Thanks 0:04:53.800 --> 0:04:56.000 a lot, buddy. So Josh, as you know because you 0:04:56.040 --> 0:04:59.360 wrote it. Micro lending doesn't necessarily refer to the size 0:04:59.360 --> 0:05:01.920 of a loan. It's not necessarily itty bitty loans the 0:05:02.040 --> 0:05:03.839 size of the loan. It's how you use it, right, 0:05:04.480 --> 0:05:08.880 It's a that's actually very true. Thanks. Um. It's uh. 0:05:08.920 --> 0:05:13.280 It refers to the the qualifications of the borrower, right, 0:05:13.320 --> 0:05:15.440 although it usually is a small loan. Right. One of 0:05:15.480 --> 0:05:18.440 the big flaws in that American dream, that capitalist free 0:05:18.480 --> 0:05:21.760 market system where supposedly everybody has an equal opportunity at 0:05:21.839 --> 0:05:25.080 obtaining success that their own hard work, is that you 0:05:25.240 --> 0:05:29.159 usually need startup capital. Right, even if you're selling hot 0:05:29.200 --> 0:05:31.840 dogs on the street, you gotta buy the car. You 0:05:31.880 --> 0:05:34.240 gotta buy the dogs. Like my bloody Mary stand last 0:05:34.320 --> 0:05:37.120 year at the golf tournament. I was not there for that. 0:05:37.200 --> 0:05:41.000 I invited. I had to to my front yard. I 0:05:41.000 --> 0:05:43.520 had to invest in the Oh yeah, that's the one 0:05:43.520 --> 0:05:46.159 where the cops came and busted it up. I lost 0:05:46.200 --> 0:05:48.039 all that money that I invested in the bloody Mary. 0:05:48.600 --> 0:05:52.880 That's what happens when the fuzz turns up. But startup cost, sure, yeah, 0:05:52.960 --> 0:05:54.960 the thing is is where do you go for startup costs? 0:05:55.080 --> 0:05:57.560 Generally go to a bank, and well, banks are run 0:05:57.600 --> 0:06:00.440 by capitalists themselves. They're looking to turn a buck, of course, 0:06:00.760 --> 0:06:04.200 so they have certain criteria that people have to meet 0:06:04.880 --> 0:06:09.400 to to to be accepted for a loan application, right, right, 0:06:10.120 --> 0:06:13.480 So the problem is is that there's huge masses of people, 0:06:13.760 --> 0:06:16.599 generally the working poor, who are usually excluded from this. 0:06:16.640 --> 0:06:19.560 They don't have collateral course not um, they might not 0:06:19.640 --> 0:06:23.560 have an education to back up this entrepreneur, probably credit 0:06:23.600 --> 0:06:26.839 history or loan history. So they're not meeting the criteria, 0:06:26.839 --> 0:06:29.600 they can't get the loan, and therefore they can't obtain 0:06:29.720 --> 0:06:32.360 self sufficiency through their own hard work or achieve the 0:06:32.360 --> 0:06:34.560 American dream. It's a it's a flaw, it's a caveat 0:06:34.600 --> 0:06:37.720 to that that system. Right. So what micro lending does 0:06:37.920 --> 0:06:42.720 is it kind of fills that gap between these excluded 0:06:42.920 --> 0:06:47.719 groups and self sufficiency by loaning to people who I 0:06:47.760 --> 0:06:50.480 put it in the article that traditional lenders would consider 0:06:50.600 --> 0:06:56.039 are are mindlessly risky. You know, these loans are mindlessly risky. 0:06:56.600 --> 0:07:01.080 That's why a dude like Muhammad units Is deserve the 0:07:01.120 --> 0:07:04.880 Nobel Peace Prize. Yeah. Time you News is a Bangladeshi 0:07:04.920 --> 0:07:08.799 economist who founded this micro lending institution called the Gramin Bank. 0:07:08.960 --> 0:07:11.120 Can I read his quote? Yeah? I love it, man, 0:07:11.160 --> 0:07:14.920 it's inspiring. Uh. He said, if banks lent to the rich, 0:07:15.000 --> 0:07:16.880 I lent to the poor. If banks lent to men, 0:07:16.920 --> 0:07:19.800 I went to women. If banks required collateral, my loans 0:07:19.800 --> 0:07:23.560 were collateral free. Here's your Nobel Prize. He also lent 0:07:23.640 --> 0:07:27.320 to the illiterate by by not having too much paperwork 0:07:27.680 --> 0:07:31.120 and poverty rural areas, rural areas where there were no banks. 0:07:31.200 --> 0:07:33.440 I mean, like, think about how little access you have 0:07:33.480 --> 0:07:36.040 to start up capital if there's no bank anywhere near you. 0:07:36.480 --> 0:07:38.800 So he sent people out to these villages to sign 0:07:38.840 --> 0:07:42.880 people up for loans. Um. And he did it pretty aggressively, 0:07:42.960 --> 0:07:46.520 but aggressively in the favor of these other people, rather 0:07:46.600 --> 0:07:50.960 than aggressively to make money himself. Um. So he found 0:07:51.000 --> 0:07:56.480 Gramin Bank, I think in the nineties, and it's actually successful. Yeah. 0:07:56.640 --> 0:07:58.840 I love the business model. It's so cool. Yeah, just 0:07:58.880 --> 0:08:01.200 the whole thing you point it out about the what 0:08:01.240 --> 0:08:04.080 he counts on to get the loan repaid is um 0:08:04.120 --> 0:08:08.560 almost like honor. It is in traditional societies. There's a 0:08:08.560 --> 0:08:11.160 lot of there's a lot at stake with a good name, 0:08:11.600 --> 0:08:14.480 and when you borrow money, you're putting your good name 0:08:14.520 --> 0:08:16.480 on the line, which is how you got the money 0:08:16.520 --> 0:08:19.840 in the first place, usually your family name. So if 0:08:19.880 --> 0:08:23.680 you don't repay it, you're basically knowing your your whole 0:08:23.720 --> 0:08:28.760 family's image. Right, so that no, it's people'll be like, hey, 0:08:28.760 --> 0:08:32.840 thanks for the money, so long chump. Yeah. Um, So 0:08:32.880 --> 0:08:36.760 they use social pressure, the traditional social pressures that are 0:08:36.800 --> 0:08:40.360 already in place to ensure loan repayment, right, which happens 0:08:40.360 --> 0:08:43.160 on a weekly basis. Is that correct? Yeah, people make 0:08:43.200 --> 0:08:46.560 weekly repayments because it's usually much more affordable. And the 0:08:46.320 --> 0:08:48.280 do the bankers on bikes. I love that these guys 0:08:48.360 --> 0:08:50.960 ride around bicycles and visit them and they give them, 0:08:51.000 --> 0:08:52.760 you know, their little payment for that week. Yeah. They're 0:08:52.760 --> 0:08:56.120 they're collection agents and they'll have maybe several in each village. Right. Ever, 0:08:56.160 --> 0:08:58.760 so these people are also these people's neighbors. But they're 0:08:58.760 --> 0:09:01.719 not like threatening collection agents, not necessarily. I don't think 0:09:01.720 --> 0:09:05.040 with Gramming Bank it's very threatening. Um, but yeah, So 0:09:05.360 --> 0:09:08.200 imagine a guy who's a collection agent that's also your 0:09:08.240 --> 0:09:11.240 neighbor who works for a lending institution that you borrowed from, 0:09:11.320 --> 0:09:13.600 showing up at your front door every week in a 0:09:13.679 --> 0:09:16.080 society where you're good names on the line, you're gonna 0:09:16.120 --> 0:09:20.200 make those repayments. And it's successful. Actually, um, not just 0:09:20.240 --> 0:09:23.920 Gramming Bank, but across the board with micro lenning in general. 0:09:24.120 --> 0:09:27.319 They have a ninety seven percent rate of repayment, which 0:09:27.360 --> 0:09:30.640 is which seats traditional banks. It's proof that it works. 0:09:30.840 --> 0:09:34.080 It is proof that it works at the time. So 0:09:34.160 --> 0:09:36.920 let's talk about how it works. The you know, Gramming 0:09:36.960 --> 0:09:39.560 Bank and other micro lending institutions aren't running around and 0:09:39.600 --> 0:09:43.920 just grabbing like you know Pedro and and um Showshana 0:09:44.120 --> 0:09:46.319 off the street. These are just two names that came 0:09:46.400 --> 0:09:50.319 up with about searching. They don't grab them and and 0:09:50.520 --> 0:09:52.719 say hey, here's some money, take some money. You know, 0:09:53.280 --> 0:09:55.480 these people actually have to have you know, business plans 0:09:55.559 --> 0:09:57.000 or at least ideas of what they're going to use 0:09:57.000 --> 0:10:00.440 the entrepreneurs without an opportunity basically, and so what it 0:10:00.520 --> 0:10:04.719 is is they're funding people in developing countries, which, as 0:10:04.760 --> 0:10:07.600 I said before, is kind of an extension of the 0:10:07.800 --> 0:10:11.280 entrepreneurial spirit that the US has founded on, and it's 0:10:11.280 --> 0:10:14.360 happening overseas now, right, spreading a little bit a bit 0:10:14.360 --> 0:10:21.160 of that capitalist love worldwide, which is love love. So Chuck, 0:10:21.280 --> 0:10:23.199 like I said, let's talk about how it works. If 0:10:23.200 --> 0:10:25.400 you wanted to go and and and make a loan, 0:10:25.440 --> 0:10:27.440 how would you do this? Would you go to Gromming Bank, 0:10:27.480 --> 0:10:30.000 fly to Bangladesh, go here's some money, give this to 0:10:30.040 --> 0:10:31.400 this person. You need to get alone and get the 0:10:31.400 --> 0:10:33.520 plane ticket though, right, yeah, now you would go online. 0:10:33.760 --> 0:10:35.480 Um is one way to do it. And I like 0:10:35.600 --> 0:10:38.079 the model used that. Well, there's two ways. There's the 0:10:38.200 --> 0:10:40.959 not for profit model, in the in the profit model. 0:10:41.480 --> 0:10:43.680 But should we talk about kiva dot com first? Yeah, 0:10:43.760 --> 0:10:47.440 that's a good one. That's the not for profit model, correct, right, 0:10:47.960 --> 0:10:50.920 And basically you you will present your business plan as 0:10:50.960 --> 0:10:56.959 an applicant UH from places like Lebanon, Tatzikistan, Molly, all 0:10:57.000 --> 0:10:59.880 over the place, all over the place. Nicaragua has a 0:10:59.880 --> 0:11:03.280 lot of people on there. And then there's users on 0:11:03.320 --> 0:11:06.000 the other end that that sign up and actually contribute 0:11:06.040 --> 0:11:09.440 toward this loan UH and good faith that you have 0:11:09.440 --> 0:11:11.520 a ninety seven percent chance of getting your money back 0:11:11.720 --> 0:11:15.200 with no profit attached. But it's it's a good will 0:11:15.240 --> 0:11:18.360 gesture and basically they people contribute as little as twenty 0:11:18.360 --> 0:11:21.760 five dollars until that loan amount is uh full. Right, 0:11:21.800 --> 0:11:24.640 So it'll be like you know, somebody's picture, and then 0:11:24.640 --> 0:11:26.800 like the name of their business, and then like what 0:11:26.880 --> 0:11:29.439 their business does. It's like adopting a person in a 0:11:29.440 --> 0:11:32.000 foreign country, very much like that actually, and you're kind 0:11:32.000 --> 0:11:35.080 of you're kind of adopting their business temporarily, right. So, 0:11:35.400 --> 0:11:37.480 so it'll also have a description of what they plan 0:11:37.559 --> 0:11:40.120 on using that specific loan for. Right, So it'll be 0:11:40.120 --> 0:11:44.520 like maybe purchasing timber for resal er um, purchasing agricultural 0:11:44.520 --> 0:11:48.960 supplies like seed or whatever. Um, And it has like 0:11:49.000 --> 0:11:51.240 a little bar and it has the loan amount, the 0:11:51.320 --> 0:11:53.319 total what they need at the end, and then it 0:11:53.360 --> 0:11:55.600 will fill up as people contribute, So a lot of 0:11:55.600 --> 0:11:58.440 different people can contribute to a single loan. Then it 0:11:58.480 --> 0:12:01.760 reaches add percent. And in a lot of cases that 0:12:01.840 --> 0:12:05.960 a site like kiva um will use a third party 0:12:06.640 --> 0:12:09.599 lending institution like maybe Gromming Bank in Bangladesh, but a 0:12:09.640 --> 0:12:13.600 local community bank usually actually issue the loan, right, Yeah, 0:12:13.640 --> 0:12:15.760 you can't just send him a check because they wouldn't 0:12:15.760 --> 0:12:18.720 have anything to do. You know, sometimes they do. Sometimes 0:12:18.760 --> 0:12:22.520 some some sites actually do issue um these loans themselves, 0:12:22.960 --> 0:12:25.360 but for the most part, they'll they serve as a 0:12:25.640 --> 0:12:30.800 intermediary between you or I who's contributing our money and which, 0:12:30.800 --> 0:12:34.160 of course which we could though, I'm just kidding. Um. 0:12:34.200 --> 0:12:36.680 And actually, the cool thing about Kiva is that you 0:12:36.720 --> 0:12:39.320 can contribute as little as twenty five bucks. I'm gonna 0:12:39.320 --> 0:12:41.480 sign up for this and also check. They have gift 0:12:41.480 --> 0:12:44.720 certificates too, So the cool thing about the gift certificate 0:12:44.800 --> 0:12:46.679 is is like, let's say you give a gift certificate 0:12:46.720 --> 0:12:49.640 to me, and what you've done is you've made it. 0:12:50.520 --> 0:12:54.360 You bet her do this. Um, you've contributed twenty five 0:12:54.400 --> 0:12:58.680 bucks basically in my name to this this Whoever's business 0:12:59.200 --> 0:13:05.680 in Nicaragua. Yeah, and I get the bucks back, I 0:13:05.679 --> 0:13:09.480 don't think so, Okay, if you do your cheap bastard um. 0:13:09.559 --> 0:13:15.839 The distinction is that you don't get any extra money back. Well, no, 0:13:15.960 --> 0:13:18.600 there's no interest return on your investment. No there isn't. 0:13:18.640 --> 0:13:21.920 But these people are paying interest the average uh, the 0:13:21.960 --> 0:13:26.280 average interest on a micro loan worldwide. It's about does 0:13:26.280 --> 0:13:27.920 that just keep the whole thing afloat is that what 0:13:27.960 --> 0:13:30.120 they use that money for. Supposedly. We'll get to that 0:13:30.160 --> 0:13:33.240 in a second, because there's actually criticism of micro lending, 0:13:33.760 --> 0:13:36.120 believe it or not. So that's the not for profit 0:13:36.160 --> 0:13:39.360 when it's really just a socially responsible investment where you 0:13:39.400 --> 0:13:41.800 can usually expect to get your full amount back but 0:13:41.880 --> 0:13:45.440 not any interest. Then there's the for profit model, right yes, 0:13:45.480 --> 0:13:49.320 like micro place dot com that's pretty much the that's 0:13:49.320 --> 0:13:51.400 on par with Kivas like those are the two big 0:13:51.440 --> 0:13:54.160 micro lending sites. And this isn't a bad thing because 0:13:54.200 --> 0:13:55.959 people are trying to make a profit and it still 0:13:55.960 --> 0:13:58.240 works out great. They get their money and um, you 0:13:58.280 --> 0:14:00.120 can get a yield as high as five percent it 0:14:00.400 --> 0:14:02.760 which I was reading an article and some guy was saying, 0:14:02.960 --> 0:14:05.480 compare that to c ds. You know, you you get 0:14:05.480 --> 0:14:08.240 a CD. That's that's giving you three percent interest. You've 0:14:08.280 --> 0:14:10.320 got a great CD right there. And a CD doesn't 0:14:10.360 --> 0:14:13.480 give some poor Bangladeshi a leg up, No, it doesn't 0:14:13.520 --> 0:14:16.320 his petticab business, although there are If you have UM 0:14:16.520 --> 0:14:18.720 four oh one k and you start looking around, more 0:14:18.760 --> 0:14:22.680 and more investment banks are creating mutual funds that loan 0:14:22.760 --> 0:14:25.960 to micro lenders like grab me bank, that kind of thing. 0:14:26.440 --> 0:14:28.840 A personal story about this, actually, I want to hear it. Buddy. 0:14:28.880 --> 0:14:31.280 You didn't know this, did you. I worked on a 0:14:31.520 --> 0:14:33.880 I did a voiceover for a friends documentary he did 0:14:33.880 --> 0:14:37.600 about the tsunami survivors and he works for a nonprofit 0:14:37.640 --> 0:14:41.080 agency like missionary work type thing, and I did the 0:14:41.160 --> 0:14:44.080 narration for it. And one of his uh, one of 0:14:44.120 --> 0:14:46.720 the guys he focused on like four different stories. One 0:14:46.720 --> 0:14:48.520 of his stories was a guy who had a petticab, 0:14:48.640 --> 0:14:51.320 you know the little bicycle cabs, and he got a 0:14:51.360 --> 0:14:53.360 micro loan I don't remember who it was from after 0:14:53.400 --> 0:14:57.200 the tsunami to buy a second and third petticab, and 0:14:57.240 --> 0:14:59.040 then the money he got from that, he opened a 0:14:59.040 --> 0:15:02.520 little or like a little small hut store. But the 0:15:02.600 --> 0:15:04.480 dude was able to build a house and like restart 0:15:04.560 --> 0:15:06.880 his family has lost his whole family. He met another 0:15:06.880 --> 0:15:09.120 woman and they ended up having kids and just like 0:15:09.160 --> 0:15:11.480 the coolest story. And I don't think he had to 0:15:11.480 --> 0:15:15.080 borrow more than like a hundred bucks or something. Man, Well, 0:15:15.120 --> 0:15:19.560 that's that's a point. Actually, um bucks. I think in 0:15:19.600 --> 0:15:23.360 the article I compared it to the the Peruvian sola 0:15:24.240 --> 0:15:27.400 um so twenty five bucks. On August two thousand nine, 0:15:27.400 --> 0:15:31.200 when I wrote this article, the exchange rate was I 0:15:31.280 --> 0:15:35.640 think seven U s dollars to seventy three Peruvian soul as, right, 0:15:36.040 --> 0:15:38.240 So I mean if you if if somebody gets a 0:15:38.280 --> 0:15:41.480 thousand dollar loan, that's almost three grand and soul as, 0:15:42.040 --> 0:15:43.920 which that's a that's a ton of cats. You can 0:15:43.960 --> 0:15:47.360 buy a lot of timber in petticabs. I have a 0:15:47.360 --> 0:15:50.400 personal story about micro lending. Really, I borrowed some money 0:15:50.400 --> 0:15:53.400 from my dad once and I still have an outstanding balance. 0:15:54.080 --> 0:15:56.320 Is how your leg is broken? Yeah, well my thumb. 0:15:56.440 --> 0:15:58.280 And that's funny. You should bring that up, my friend. 0:15:58.720 --> 0:16:00.800 That was a great set up. You may notice that 0:16:00.840 --> 0:16:03.760 this is actually it bears a striking resemblance to loan sharking, 0:16:04.280 --> 0:16:07.720 which still exists in a lot of countries. And actually 0:16:07.720 --> 0:16:10.040 I read that micro lenders are starting to give loan 0:16:10.040 --> 0:16:12.520 sharks a run for their money because there is no 0:16:12.560 --> 0:16:15.280 attendant threat of violence driving the amount of business, and 0:16:15.360 --> 0:16:18.120 their interest rates are much much lower. Yea, what is it? 0:16:18.360 --> 0:16:20.360 I looked it up. Actually I couldn't find what a 0:16:20.360 --> 0:16:23.240 loan shark rate might be. Oh often like a thousand 0:16:23.240 --> 0:16:28.880 percent three Yeah, just astronomical amountain. Yeah, and you you 0:16:28.960 --> 0:16:31.840 will have your legs broken. Yeah, yeah, they don't. You 0:16:31.880 --> 0:16:34.400 know Mohammed Unus he won the Nobel Peace Prize. He's 0:16:34.440 --> 0:16:37.480 not really into late breaking, I don't think anymore. And 0:16:37.520 --> 0:16:39.000 you can tell look at him. Did you see him 0:16:39.000 --> 0:16:41.400 in the article. He's got his little Nahru jacket on 0:16:41.600 --> 0:16:43.760 and he just looks like, you can trust me. I 0:16:43.800 --> 0:16:47.640 helped the poor. Here's go build a business. Yeah. So yeah, 0:16:47.680 --> 0:16:50.640 that that that little amount that you contribute really has 0:16:50.680 --> 0:16:55.440 a huge effect in the developing world, right right. Um, 0:16:55.480 --> 0:16:57.840 so that's pretty much the nuts and bolts of how 0:16:57.880 --> 0:17:04.280 it works. Like I said, there's mutual funds, right and supposedly, um, 0:17:04.280 --> 0:17:06.960 it actually does have an impact a lot of people. 0:17:07.000 --> 0:17:10.679 As we were saying that export of capitalism of the 0:17:10.720 --> 0:17:13.000 American dream. Yeah, I like to tie you made there 0:17:13.160 --> 0:17:15.119 or that other people have made that you highlighted. Well, 0:17:15.160 --> 0:17:18.960 there's a there's a theory that um globalization prevents war 0:17:19.600 --> 0:17:21.639 that hasn't been fully panned out yet. A lot of 0:17:21.640 --> 0:17:26.679 people thought that that the interdependent economies of the nineteen 0:17:26.720 --> 0:17:30.480 twenties and thirties would prevent war, and we still had 0:17:30.480 --> 0:17:34.040 World War two. Um, so that's that that that kind 0:17:34.040 --> 0:17:37.480 of undermine that I personally think that we just weren't 0:17:37.520 --> 0:17:40.040 at the stage of globalization yet that we are now, 0:17:40.240 --> 0:17:43.159 and that I think globalization can prevent We're just because 0:17:43.800 --> 0:17:49.240 money Trump's ideology any day, Especially if you are in 0:17:49.520 --> 0:17:54.320 such a position of power, um that you are commanding 0:17:54.640 --> 0:17:58.359 armies or economies or nations or whatever you're You're probably 0:17:58.359 --> 0:18:01.080 gonna go with your economy over idea. Right, I got 0:18:01.080 --> 0:18:04.679 another quote from your own article. Well, this kind of 0:18:04.680 --> 0:18:06.639 backs that. This is what the Nobel Committee said when 0:18:06.680 --> 0:18:10.280 they awarded units the prize and oh six lasting piece 0:18:10.359 --> 0:18:14.199 cannot be achieved unless large population groups find ways in 0:18:14.200 --> 0:18:18.120 which to break out of poverty. And dude, that's pretty succinct. Yeah, 0:18:18.160 --> 0:18:20.640 a lot of people were surprised when UNUS won the 0:18:20.680 --> 0:18:22.679 Nobel Prize. Yeah, but how can you break out of 0:18:22.800 --> 0:18:26.160 poverty is by getting a microlone starting own business. There's 0:18:26.160 --> 0:18:29.960 a there's another theory that um poverty or terrorism is 0:18:29.960 --> 0:18:33.520 bred by poverty rather than um religious ideology or dogma. 0:18:33.680 --> 0:18:38.120 I could be down with that. So yeah, you go, whoa, whoa, whoa, whoa. 0:18:38.240 --> 0:18:41.240 Let's stop this gehad and maybe we can explore some 0:18:41.280 --> 0:18:44.040 business opportunities instead, Like wouldn't you rather open up a 0:18:44.119 --> 0:18:46.600 jihad stand then blow yourself up in the middle of 0:18:46.640 --> 0:18:49.440 that market? Right yeah? Um, And if you have a 0:18:49.560 --> 0:18:52.280 stand in that market, you're not gonna want suicide bombers. 0:18:52.320 --> 0:18:56.200 There's bad for business. Um. Well. A lot of people 0:18:56.200 --> 0:18:58.280 say there's not a lot of evidence though, right on 0:18:58.320 --> 0:19:00.720 the other side of the coin. Yeah, there's a eleconomists 0:19:00.760 --> 0:19:03.560 I quote in this saying there we we are utterly 0:19:03.600 --> 0:19:06.800 devoid of evidence. And there's some there's some studies that 0:19:06.840 --> 0:19:11.760 have shown that it doesn't necessarily help. Um. These people 0:19:11.800 --> 0:19:14.240 may repay it, but there there there's no follow through 0:19:14.280 --> 0:19:16.240 on them actually using the loan for what they say 0:19:16.280 --> 0:19:18.560 they're going to. You know, I mean like if you 0:19:18.680 --> 0:19:25.960 suddenly have three thousand soul as, um, yeah, you could 0:19:25.960 --> 0:19:28.440 easily do that, or you could, you know, pay rent 0:19:28.520 --> 0:19:31.320 or something like that. There's things come up. You know, 0:19:31.400 --> 0:19:35.000 how much money have you spent that was marked for 0:19:35.080 --> 0:19:37.440 something more important but you had to deal with something 0:19:37.480 --> 0:19:39.600 that was an emergency that came up, right, or if 0:19:39.680 --> 0:19:41.439 you know, someone knows, if your neighbor knows you got 0:19:41.480 --> 0:19:43.080 a loan and you get robbed or something. I'm sure 0:19:43.119 --> 0:19:46.640 other things happen. And apparently Michael Lending is still young 0:19:46.760 --> 0:19:50.160 enough that it requires injections of capital. Like these lending 0:19:50.160 --> 0:19:54.280 institutions themselves to stay afloat, they themselves aren't self sufficient, 0:19:54.800 --> 0:19:57.000 which you have to have that self sufficiency to help 0:19:57.000 --> 0:19:59.720 other people become self sufficient. I think the jury is 0:19:59.800 --> 0:20:02.800 very much still out and and just the theoretically, it's 0:20:02.840 --> 0:20:06.160 such a noble idea that I can't imagine it won't 0:20:06.200 --> 0:20:09.000 be given more and more slack or whatever it needs 0:20:09.040 --> 0:20:13.399 to continue. And a rate, I mean, you can't argue 0:20:13.400 --> 0:20:18.040 with that. No, and that rate though has actually led 0:20:18.080 --> 0:20:25.840 to some really um despicable plots. Yeah. That the Mexican banks. Yeah, 0:20:25.960 --> 0:20:31.879 the Grommin Bank has actually pointed out that this vastly 0:20:32.000 --> 0:20:37.560 overlooked segment of the population are dependable to repay loans. 0:20:37.920 --> 0:20:40.520 So as a result, some banks have come up to 0:20:40.760 --> 0:20:45.000 create to issue micro loans, but not to help poverty, 0:20:45.119 --> 0:20:48.320 but to make money specifically lent to the poor. Though. 0:20:48.400 --> 0:20:52.040 Still Yeah, there's a guy in Mexico who owns the UM. 0:20:53.280 --> 0:20:56.480 They were kind of like the Walmart of Mexico UM 0:20:56.560 --> 0:20:59.679 And I can't remember his name, but he's just multi 0:20:59.720 --> 0:21:03.399 BILLI a their business guy. And he said that his 0:21:03.480 --> 0:21:05.960 father taught him, if you want to make money, sell 0:21:06.040 --> 0:21:09.520 to the poor, mainly because there's so many of them. Right, 0:21:09.680 --> 0:21:12.320 So he started his business and made a bunch of 0:21:12.320 --> 0:21:14.800 money selling to the poor, selling you know, cheap consumer 0:21:15.119 --> 0:21:18.480 products through his retail stores. Well, he founded a bank 0:21:19.000 --> 0:21:22.119 very much like Walmart. He founded a bank called Banko 0:21:22.200 --> 0:21:27.719 as Teca two. Yeah, they are a micro lending institution 0:21:27.800 --> 0:21:31.639 that this guy owns, and they issue these small loans 0:21:31.640 --> 0:21:35.040 to the poor, the working poor, um, but at really 0:21:35.440 --> 0:21:38.400 astronomical interest rate. Yeah, they drive him further into debt 0:21:38.440 --> 0:21:41.800 instead of pulling them out of the meyer in the monk, right, 0:21:41.840 --> 0:21:45.240 and they're still issuing these loans in these traditional societies 0:21:45.280 --> 0:21:48.040 that have these social pressures, they also use a lot 0:21:48.080 --> 0:21:52.399 of um micro lending practices like bankers on bicycles. But 0:21:52.520 --> 0:21:54.440 these guys are the ones who come into your house 0:21:54.440 --> 0:21:56.200 and right down the serial numbers on all of your 0:21:56.200 --> 0:22:00.560 stuff until we'll repossess this, and they do um. And 0:22:01.440 --> 0:22:06.480 it's just it's a perversion of micro lending. It's exploitation. Yeah. Yeah, 0:22:06.640 --> 0:22:11.080 a p R is up to you said more than sometimes. 0:22:11.080 --> 0:22:14.000