A Quote by Evgeny Morozov
Making loans accessible to millions of the previously unbankable customers is a noble goal. Getting them hooked to such loans isn't.
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Our focus is more on secured retail business like housing and car loans. While we will do some unsecured loans - credit cards and personal loans - we will do it primarily with existing customers.
I founded Grameen Bank to provide loans to those considered traditionally unbankable. Grameen Bank works with the poorest and often illiterate, providing uncollateralized micro-loans for tiny business enterprises by which they can lift themselves and their families out of poverty.
If I'm a bank, and I'm making risky loans, I have an incentive, if I can, to make those loans using other people's money: in other words, to make highly leveraged loans.
A world where wages no longer rise still needs consumers. Middle-class purchasing power has been maintained through loans, loans and more loans. The Calvinistic reflex that you have to work for your money has turned into a license for inequality.
Normally, banks record profits on loans only as they are repaid, whether they securitize the loans or hold them on their books.
Sometimes there are customers who get in difficulty because of situations that are out of their control. These are customers with genuine needs, and the role of the bank is to accommodate these customers, and there is a real need to reschedule the loans of these customers.
What people do is they pay the small loans first. Why? Because they enjoy making the number of loans smaller. But of course it is a very ineffective way to pay debt down.
Even President Bush has cited the need to outlaw the practice of corporations making loans to their officers. Strangely enough, when the President was a corporate officer, he took out several loans from the company.
If there were not derivatives, there would be no bank loans at all today, because people want to get fixed-rate 30-year loans, but banks don't want to keep 30-year loans on their books.
Making loans and fighting poverty are normally two of the least glamorous pursuits around, but put the two together and you have an economic innovation that has become not just popular but downright chic. The innovation - microfinance - involves making small loans to poor entrepreneurs, usually in developing countries.
Like many other banks and finance companies, Green Tree used a process called securitization to resell its home loans to outside investors. Green Tree grouped thousands of these small loans into a pool worth hundreds of millions of dollars.
Banks will have to win the confidence of their customers through fair dealing, making good loans, and remaining financially healthy.
When banks extend loans to their customers, they create money by crediting their customers’ accounts.
Too-easy credit and millions of bad loans made during the U.S. housing bubble paved the way for the financial calamity and Great Recession that followed. Today, by contrast, credit is too tight. Mortgage loans are particularly hard to get, creating a problem for the housing market and the broader economy.
When the financial system works as it should, money and capital flow to and from households and businesses to pay for home loans, school loans, and investments to create jobs.
The loans I took out for my undergraduate degree were manageable. But my legal education was more expensive, and I paid for it almost entirely through public and private loans.
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