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"Making Markets Safe for the Vulnerable" 17th Microcredit Summit plenary: http://17microcreditsummit.org/?p=4100 Financial markets driven by profits as their primary objective can create great benefit for the poor, but can also exploit the poor. History gives many examples of products that were developed to benefit the poor, but end up being used to exploit them. In markets where providers and buyers have equal power, the principle of caveat emptor (buyer beware) prevails. But in markets like financial services for the poor, the provider has a lot more information and power than the buyer. What regulations and practices need to be established so the market does not use that information and power advantage to exploit those living in poverty? Specifically, what roles do high interest and high profits play in encouraging over indebtedness and crashing markets? What steps can governments, regulators, associations and providers take to encourage the growth of markets that benefit those living in poverty and restrain practices that cause harm or market collapse?
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ofinance
Merch
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Banks
SOFO
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FIPO
Personal
Loan
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Dpt Sto
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Share of OB Share of Arrears Bal Overdue
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Micr
ofinance
Merch
andise
Banks
SOFO
M/SO
FIPO
Personal
Loan
s
Dpt Sto
res0%
10%
20%
30%
40%
0%
10%
20%
30%
40%
50%
60%
Share of OB Share of Arrears Bal Overdue
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Qualitative Interviews
Qualitative Interviews
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