Banking On The People

The Client List, a 2010 feature film starring Golden Globe nominated Jennifer Love-Hewitt for her role as Samantha Horton, is a compelling and sad film. It tells the story of a couple and their three children, struggling to pay their mortgage, faced with the prospect of losing their home. At the start of the movie Samantha Horton attempts to use her beauty and womanly assets to persuade the bank representative to give them more time as they have fallen behind on their payments – all to no avail. Eventually Samantha becomes a prostitute at a brothel disguised as a massage parlour, until it is discovered what the masseuses are really up to. While the movie is great entertainment, it is sadly based on true events; dating back to the 2004 Odessa Healing Touch sex scandal. It is a saddening thought that a woman would turn to prostitution in order to eradicate debt, and even more concerning that a foreclosure notice could inspire people to abandon their morals. This is not the only case of desperation clouding someone’s judgment. In 2009 a 69 year old man was arrested for robbing a Bank of America branch in San Diego. It is reported he handed over a note declaring his possession of a bomb. He took US$107,000 from the bank. The elderly man was approximately US$50,000 in debt as a result of the increasing interest on his mortgage. He stated therefore, that his actions were that of a desperate man, acknowledging that his status as a retiree meant his fixed income could never have allowed for him to keep up with the payments. This man only sought to be able to keep his home for himself and his 73 year old wife when banks threatened to take it away.

According to an article in the Times-Herald “The U.S. lost 1.2 million households from 2005 to 2008 even as the country’s population increased by 3.4 million, according to a study from the Mortgage Bankers Association.” With a statistic like this, although we cannot condone the acts of prostitution and stealing, we can certainly understand the need for microcredit banks worldwide. In 2006, Bangladesh born Muhammad Yunus was awarded the Nobel Peace Prize for his work in founding of the Grameen Bank; The Grameen bank was established to enable poor, lower income earners, with an emphasis on rural women, to obtain small loans without the need for collateral- all the while maintaining a loan recovery rate of 98.3%. These are banks that are truly for the people. They exist so that lower level income earners are at less risk of being homeless, contributing to the growth and development of nations.  They do fit the label, “Bank for the Poor”.

Another interesting, more technology based form of microcredit banking introduced to the developing world is known in Kenya by the name of M-Pesa; a mobile phone based money transferring service. In April 2011 the economist reported on the digital revolution in Africa and I quote: “Since mobile-phone coverage is far better than fixed-line availability, the result has been that the cell phone is swiftly becoming Africa’s computer of choice.” So it only makes sense that M-Pesa has been so well received in Africa. Not only does it provide banking opportunities for lower income earners, it is an affordable medium everyone can use to pay bills or transfer money to family and friends.

These examples of successful banking services in both Bangladesh and Kenya are cases of people recognizing that persons of all economic backgrounds have a right to a home and some sense of security, without need for collateral.

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