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AP IMPACT: Lender’s own probe links it to suicides

I thought this sort of thing only happened in grubby capitalist assembly plants like Apple’s in China.  Who knew that trendy lefty ideas could be infected by it, too?

More than 200 poor, debt-ridden residents of Andhra Pradesh killed themselves in late 2010, according to media reports compiled by the government of the south Indian state. The state blamed microfinance companies — which give small loans intended to lift up the very poor — for fueling a frenzy of overindebtedness and then pressuring borrowers so relentlessly that some took their own lives.

The companies, including market leader SKS Microfinance, denied it.

However, internal documents obtained by The Associated Press, as well as interviews with more than a dozen current and former employees, independent researchers and videotaped testimony from the families of the dead, show top SKS officials had information implicating company employees in some of the suicides.

It’ tragic for the families involved, though.  It just goes to show that even microlenders are subject to default risk, from people who all too often really do have no other options.

Posted in Economics.