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Sohini Kar is an American anthropologist and a Harvard Fellow. Her primary interest of research is anthropology in regards to economy, finance, development and debt. Sohini Kar is the author of the article, "Recovering debts: Microfinance loan officers and the work of ”proxy-creditors” in India." One can infer this article is meant for other anthropologists who are interested in the economy and the global finance system. In Kar’s introduction she dives into the world of loan officers and their relationship to the borrowers. Throughout the text she introduces several theories of ethical practices and relationships to the lender and the borrower. In order to support her argument, she incorporates other theories from various anthropologists to solidify her thoughts.
What is it about, empirically?
Sohini Kar’s article revolves around the global financial market. However, her central focus is in Kolkata, India, where many who live in the slums owe microloans to private banks. The issue Kar raises is in a national platform, due to the fact that 60% of Indian population lacks formal financial services (481). This is a national issue due to fact that it traps many of their citizens in a never-ending cycle of debt, with no proper oversight. The time of her study was from 2009 to 2011, right after the financial crisis in Western countries. The author makes a comparison of the different dynamics loan officers are exposed to in terms of culture in India.
The world is full of financial hardship, and American society possesses a great deal of controversy concerning lending. Unfortunately, short term lending, such as payday loans or title loans, creates a structural void within American society. According to Wikipedia, “Structural inequality is defined as a condition where one category of people are attributed an unequal status in relation to other categories of people” (wilipedia.com). When working class Americans apply for a payday, the unequal status between upper and middle class possess a bigger separation financially. The never-ending process of a short term financial fix becomes lifelong debt. Thus, middle class society becomes lower class society. Eventually, working class society will struggle to say above the poverty line. In addition to an imbalance in society classes, short term lending targets consumers who life paycheck to paycheck. In Rigging the Game by Michael Schwalbe, the author explains the reproduction of inequalities. Schwalbe discusses the different kinds of capitals human, social, and cultural (10). The three capitals unknowingly shape Americans social system. Many businesses capitalize on these capitals knowing no laws or regulation exists to stop them from capitalizing on individuals who no faults of their own were born into these unfair capitals. As a result, short term lenders possess the ability to have extremely high interest rates and outrageous fine print penalties because there is little
In both developing and emerging economies, microfinance has vastly and increasingly been seen as one of the most important means for enhancing the lives of the poor and therefore a major tool for economic and social development mostly in rural areas. Lately, contrary to this widespread belief, critics have raised eyebrows against this growing popularity of microfinance as a major tool for enhancing economic development. Contrary to belief, they are of the opinion that microfinance is a ‘make-belief’ that is hindering economic and social development rather than enhancing it.
The book, Microfinance and its Discontent: Women in Debt in Bangladesh written by Lamia Karim, gives us account on what causes a culture to be known as “economy of shame” status, such as in the case of Bangladesh. She writes on a subject that is a top list priority in the economical world these days, the corrupt ways NGO’s lenders do business not only in Bangladesh but across the world, however, she centralizes her views on Bangladesh and only a handful of NGO’s. Even though this was primarily a look at Bangladesh, it has resulted in capturing the attention of people across the globe not only with the NGO’s mention in the book but resulting in a closer look at all NGO’s and how they serve the people. Karim shares with the readers how the 1980’s nongovernmental organizations (NGOs) led in the way of microfinance institutions and claimed that they were providing women with an empowerment tool by issuing them loans. We find that over 80% of borrows are women and most are economically challenged already. With that being stated Karim also takes a look at how and why that is, she discusses the long term effects it is having on women and how it is furthering the exploitation of women in Bangladesh. She looked at how this type of exploitation has not only weakened further women’s economy in Bangladesh but has also strengthen the power NGO’s have over the people (mainly women) at the same time. It takes a look at this type of expansion and brands NGO’s use as a “shadow state
Micro credit is the process of helping the “poorest of the poor” obtain loans. Since big time banks rarely help people who need help acquiring loans, micro credit is another source that makes it possible for the lower class to achieve that. They focus on they call the “real economy,” where they are on personal relationships with their clients. They want them to succeed and help their clients change their own life. Compared to the big banks, they are not looking to make huge amount of interest back off their loan (paper chasers).
Financial institutions are key component to a functioning society in today’s day and age. The economic cycle depends on financial institutions to conduct transactions for its worldwide clients. These transactions can be as small as withdrawing money or applying for a loan to start up a new business. The employees of every financial institutions are the key to successfully providing these services to their customers.
As evolution proceeds through time, it carries the gift of facilitation and intelligence. However, in today’s intellectually advanced society there has been a cloud of egotism that has decimated mortality and integrity amongst individuals in an unpredictable economy. The financial crisis that took place from 2007-2009 was based on the lack of moral judgment and a surplus of gluttony that affected the united states economy drastically. This crisis is primarily based on the negligence of banks by granting loan opportunities to individuals who do not qualify due to bad credit score, lack of assets to make a down payment, employment status. However, numerous banks had predicted and were aware that most of the individuals who applied for a loan and did not qualify would default on their mortgage, which would allow banks to repossess the house and sell it for maximum value.
“The near-collapse of the American financial system has led to a search for its causes and ways to prevent it from happening again. Many political leaders blame at least some of the subprime mortgage crisis on mistakes caused by financially ‘illiterate’ consumers and propose to solve that problem with mandatory classes in personal
In the early 2000s, new opportunities opened doors for the world’s “giant pool of money” (Glass, 2008) to reap large profits through unique housing investments and transformed the residential mortgage market; however, unforeseen events, as a result of poor judgment and flawed actions caused individual turmoil and the loss of trillions of dollars instead. The downfall began with new loan criteria where unqualified individuals could effortlessly be approved for costly loans. This resulted in short-term prosperity for banks, brokers, and Wall Street workers, that ended in long-term devastation. Fundamentally, these investors were using social proof and common biases, both which offered undeniable shortcuts in order to analyze data and make decisions, but which ultimately led to a global credit crisis.
One important element of the caste system is the concept of “begar”, or the requirement of Dalits to provide service without payment. Traditionally, this entailed undertaking the most undesirable jobs as a contribution to the community, a category that includes agricultural work. As a cultural norm, “begar” has endured into modern times, and is often exploited by landowners as a means of sanctioning a system of debt bondage. The fact that Dalits are typically landless means that they are oftentimes entirely dependent upon their landlords economically. This is particularly true of the indigenous Tharu communities in western Nepal, where most of that country’s rice is grown. Within the exploitative debt labor system known as Kamaiya, Tharu families depend upon their landlords for even the most basic food and shelter. Their position at the bottom of the caste system and their complete economic dependence upon landowners make Dalits particularly prone to exploitation. Often they are forced to accept loans from their employers to survive and to meet social obligations associated with death and marriage. These loans are designed to be impossible to pay back, and because Dalits are traditionally denied education, they are left with little recourse but to accept the loans and become indebted to their landlords. Just as one’s position in the caste social hierarchy is inherited, so debts are passed from one generation to the next. Debt bondage in South Asia is implemented with varying
The U.S. subprime mortgage crisis was a catastrophe affecting both real and financial sectors of the global economy. It was estimated that 2.5 million borrowers had lost their homes due to foreclosures from 2007 to 2009 and whilst another 5.7 million homeowners were at pending risk of foreclosure in the aftermath of the crisis (Williams, 2012). The failures and bailed out of large banking and financial institutions in the US, the UK, Europe and others such as Bear Sterns, Lehman Brothers, Northern Rock, AIG, Freddie Mac, Fannie Mae and etc. including the major collapsed of Iceland’s systemic banking, characterised as one of the largest experienced by any country in economic history, is an emblematic of the excessive and imprudent lending
A collapse of the US sub-prime mortgage market and the reversal of the housing boom in other industrialized economies have had a ripple effect around the world. Furthermore, other weaknesses in the global financial system have surfaced. Some financial products and instruments have become so complex and twisted, that as things start to unravel, trust in the whole system started to fail.
The Global Financial Tsunami during 2007-2009 is considered as the most serious financial crisis since the second half of the twentieth century, leading to liquidity shortage in the world’s main financial markets, further influencing the real economy, and sending the world into recession. This crisis primarily stemmed from the subprime mortgage crisis in the U.S., which can be interpreted as the banking emergency triggered by the burst of the real estate market bubble, excessive credit, and abuse of financial derivative instruments (Szyszka, 2011). Most studies about the chief culprit of this crisis mainly focused on “institutional failure” (Barberis, 2011), while psychological factors also played a central role because of “animal spirits”
He lamented “The Patel, Patwari, Deshmukh and all landlords of the villages pervasively watch each day to day activity of the poor and in particular the Shudras. They advance loans to needy poor persons and in lieu of interest payment; the person is forced to provide free labour in the field. In the event of a death of the borrower earlier the repayment of debt, the rest of the family members are forced to labor until the debt repaid, Since time immemorial generations of families have inherited this debt bondage; consequently, numerous poor persons are born debtors, die as debtors and many times debt passed on to the succeeding generation. Alas! They are not allowed to earn money to pay back the debt. Furthermore, once a person or a woman deceived finds it impossible to come out of the vicious circle. This in herniated debt chain should be abolished. It is known that a bonded labour is not directly benefited out of the profit from lands and hence, he will not work with a
One of the countries that suffered from this financial crisis was India because of its huge exposure in the region to the point that there are approximately 4.5 million Indians who live and work in Dubai. The other effects of Dubai's financial
List of abbreviations List of tables Acknowledgements Abstract 1. 2. 3. 4. 5. 6. 7. 8. Introduction Problem statement Objectives and hypothesis of the study Literature review Structure and performance of the financial sector in