IDS 30921 Lecture Notes - Lecture 22: Loan Shark, Mother Teresa, Making Money
14 Nov 2016
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Financial costs: whatever it is that you are paying ($ interest, $ principal, fees) Transaction costs: non-financial costs (time, lost wages, stress, transportation, conditions of the loan- forced savings, training-: interest rates. Nominal: quoted rate of interest on a loan. Effective: actual rate that borrowers pays for a loan, including interest, fees and commissions. Real: either the nominal or effective rate adjuster to compensate for inflation: self- sufficiency. Company that provides loans in latin america. Spectrum: started as a non-profit with some revenues transformed into for-profit (now is a public company) Spectrum: started as a non-profit with some revenues. Yunus argues that microcredit should only focus on eliminating poverty not making money according to him, compartamos should forget the idea of making money. Cost of lending money in mexico is higher than in other countries. Believed they needed to grow the number of people that have access to microcredit, and they have to fund this growth.
