This is worth reading, you pile of horserace junkies. Debt! Capitalists! Killer apps! People profiting off human misery! Peculiarities of Kenya! What's not to like? Warren and Sanders both endorse reading this article. Biden says something vague about how obviously he knows all about Kenya and what it was doing in his pajamas he'll never know, blink blink blink
1 is correct. It was a little bit depressing, but more profitable than focusing on the primary.
I know! It's fascinating! (When I saw Stanster's post, I almost took this down to save it for later.)
Capitalist development is like a video game where you make it past the first level (subsistence farming) and then you face a tougher boss (predatory lending).
The only way to win is not to play the game.
After the 2010 earthquake, the Gates foundation throw a shit-ton of money to fund a prize for telecommunications companies to recreate MPESA in Haiti.
It was one of the most impressive acts of neoliberal bullshit I've ever seen. At one point, one of the companies was juicing the metrics they needed to win the prize by subsidizing the purchase of lottery tickets via their mobile money app.
The effort basically ended around the time the last of the prize money was claimed.
Not working if you don't get paid is something that telecom companies are good at, but maybe former subsistence farmers need to learn that.
Anyway, maybe buy the mailing list from the lenders and organize a debt strike? Probably don't mention that when you ask to buy the list.
I don't see that M-PESA is intrinsically bad. It provided bank-like services; banks aren't intrinsically bad either, they provide important services. But to the extent your app is providing bank-like services it needs bank-like regualtion.
What gets me is how many panels I've sat through with various economic development types going on about how M-PESA is the harbinger of our glorious FinTech future and nobody ever mentioned this aspect of the thing. Turns out "banking the unbanked" means getting them into debt. I guess I that part was just assumed?
I mean, M-PESA has legitimately accomplished a thing that for Kenya that lots and lots of countries are trying to do, and its probably helped a lot of people and boosted the economy of some very poor places. But this whole payday lending-type trap they've built on top of it never seems to make it into the discussion.
I know 5 is a joke, and I take the point in 12, but I think they also imply there's some clear line between subsidence poverty and capitalist poverty, and people aren't indebted in the former. I think that's actually seldom the case. In Ladakh, for instance:
Many households had historically been heavily indebted to landlords and moneylenders. Most commonly, farmers became indebted because they were unable to raise the interest to repay in kind the grain borrowed for sowing at the start of the season.In theory by aggregating debts like that a bigger organization might be able to charge lower interest. There may also be some micro-political benefits to having debts owed to a distant telco/bank rather than the local cacique. (Though by the same token the debtors may lose customary claims to relief:
According to Kalon Rigzin Namgyal, debts rarely were collected forcibly and could be settled through symbolic payments. According to him, if one owed 100 khal (of grain; one khal equals about ten kilograms)32 and could not repay, one could give a rope and the debt would be cancelled. For 1,000 khal, one would have to pay one goat skin, and for 2,000, one bull (Rigzin Namgyal 1995). Other older people insist, however, that indebtedness was indeed a serious problem.) All that said, 13. Of course.
"Turns out "banking the unbanked" means getting them into debt. I guess I that part was just assumed?"
I hate to get all dsquared but being able to get into debt is an absolutely terrific thing and all of us, and all our countries, would be massively worse off if not for our ability to get into debt.
11: It does have bank-like regulation; the regulator is the Central Bank of Kenya [or whichever country], and IIRC the client balances are in an actual bank [when I last looked, Standard Bank].
Also 14 is completely right. Debt bondage is absolutely rife in peasant economies! That's really well known in the history of the United States.
16.1: I was unclear. I meant, in the case of Kenya at least, different rules are being applied, as in:
Its profitability depends, in part, on a discursive gymnastics that defines the 7.5 percent premium on borrowed funds as a "facilitation fee" rather than an interest rate. Were it judged to be the latter, it would be subject to a legal limit well below its current annualized cost of around 100 percent.