When told that a third world country small business is being helped by microloans many people think of small fruit stands, perhaps a bakery, and here and there a weaving company. All in all the image is wholesome. But are all of the entrepreneurs really taking part of constructive businesses?
This article, from the San Francisco Weekly from February 2008, tells of a women who asked for a $700 loan to help fund her cock-fighting business.
http://news.sfweekly.com/2008-02-27/news/kiva-s-micro-loans-underwriting-cockfighting-in-peru/
At this point the question comes up, who is responsible for scanning the loan applicants to make sure the money will be appropriately used. Is it the job of the loaner, who is able to read what the loan is going to, and therefore is able to make a fully informed decision on whether to make the loan or not? Or should the job fall to the over-seeing bank foundation?
Personally, I feel that if someone wants to donate money to help a women start a cock-fighting business that is their deal. As long as the loan seeker is not asking for money to help fund illegal programs then the over-seeing banks should not deny them the opportunity to reach the rest of the world in their attempt to find funding.
What is your opinion on this?
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