2006-10-21 04:30:26 · 5 answers · asked by stvenryn 4 in Business & Finance ➔ Credit
Banking regulations create high overhead for microcredit providers in the US. This would require a ridiculously high interest rates for the borrowers if the providers were to stay in business. Although it's been very successful in developing countries, that success can't just be transported to the US.
Payday lenders fill that void right now (smaller loans, exorbitant rates, minority area locations), and the only way I can see the US becoming a hotbed of microfinance activity is if regulations were changed to allow microfinance institutions more leeway.
2006-10-22 17:48:28 · answer #1 · answered by deltaaovert 1 · 0⤊ 0⤋
The truth is for the same reason they can't offer microcredit to majorities inspite of their bad credit history.
2006-10-21 04:37:29 · answer #2 · answered by Jessica M 4 · 0⤊ 0⤋
Why do you automatically assume that a member of a minority will have bad credit?
I'm a revlatively recent immigrant, from Europe to the US, that makes me a minority... I've also got an extremely good credit history, which US banks refuse to acknowledge...
2006-10-21 04:39:58 · answer #3 · answered by IanP 6 · 0⤊ 0⤋
For the same reason you don't give money to the doper on the corner-the chances of your getting your money back aren't very good, after all, banks are in the business of making money, and you've established a record of not giving it back, handling it poorly, spending it unwisely, etc.
Now, because you're a minority you want to be given money, regardless of whether you deserve it of not--good work if you can get it.
2006-10-21 04:41:57 · answer #4 · answered by dulcrayon 6 · 0⤊ 0⤋
Local banks might not but it is possible to get a credit card if you deposit money up front.
Unfortunately a credit history is the criteria used to issue credit. If you've screwed up in the past it hurts your chances to get credit.
2006-10-21 04:38:30 · answer #5 · answered by John K 5 · 0⤊ 0⤋