How big Mexican banks profit as many poor borrowers get trapped in a maze of debt
by Keith Epstein and Geri Smith December 24, 2007
Photographs by Bruce Gilden / Magnum
In a gleaming office tower in Mexico City secured with retinal scanners, bulletproof glass, and armed guards, dozens of workers in white lab coats dart around a large operations center monitoring long rows of computers. Along one wall, 54 enormous screens flicker dizzyingly with numbers, graphs, and fever charts: a relentless stream of data. You'd think the urgent mission involved tracking the trajectory of a spacecraft or the workings of a national power grid, not tiny amounts of cash and credit for Mexico's working poor. http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm?chan=magazine+channel_in+depth
3 comments:
It amazes me that the Mexican government has done nothing to stop microlending. This seems like a classic case of the rich getting richer and the poor getting poorer, and it is frustrating to see these poor Mexican families being taken advantage of. All they want is a better life, which they believe can be obtained by starting a business. Unfortunately, most of them lack the education to understand what they must pay in the long run, so lives are being destroyed.
This reminds me of the "check into cash" places in the United States which also have high interest rates. I can see how it would be appealing to just get a loan or get a large amount of cash from places like this, but i feel it is unfair considering most of the people using these facilities do not fully understand that they are getting deeper into debt. I strongly believe that these places should not exist, or be closely monitored so that people will not be taken advantage of.
This article is just another representaion of Globalization and the corruption that lies beneath it. The rich getting richer and the poor getting poorer. I feel for these poor families going through these rough times. What is even more terrifying is that the US interest rates are terrible as well. I definitely feel that there needs to be some type of regulation of the behaviors of these lendors. Even then,who know when the corruption will stop.
Wanted to add to the comments with a little bit of my experience. I recently took a course on the anthropology of neoliberalism where we discussed how big of a hit microlending seems to the United States, and how it is seen like a well-designed strategy in the neoliberal world for poor people in foreign countries to have access to wealth without the involvement of their governments, which are seen as corrupt anyway. As this article points out, and as the classmates do, the reality is conditions often worsen as a result of microlending. Julia Elyachar, in Markets of Dispossession writes about microlending in Cairo, which results in the dispossession of the means of survival of the poor. Wheareas they once had their "informal" modes of subsistence, once they were integrated into the "formal world economy" through microlending, they could no longer survive.
To add one more thing to my already lengthy comment, the really scary thing is that despite these articles, books, and real cases worldwide, people in power in the United States seem to be very hung up on our way of doing things. Like we discussed in class today, the World Bank and the IMF impose standards abroad that we believe are the best, like rationalization and standardization in our sense of the concept. I participated in a conference at West Point Academy discussing foreign policy in Latin America, and microlending was talked about as one of the best ideas of the 21st century. I hope this helps point out that we can criticize the Mexican government, the Egyptian government, and governments all across the world for being corrupt and for letting things like microlending happen, but we have to also recognize the really large force behind it that is pushing it onto the rest of the world.. US.
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