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July 31, 2013



"Imagine two polar opposite societies. In one, individuals are isolated and anonymous. In the other, they are part of a dense social network of friends, family and colleagues."

People in the latter stand a good chance of being refused a loan because they've fallen out for some personal reason with the person (or someone connected to them) running the credit union. Its a return to a 50s style society where everyone knew everyone else's business, and it really was a case of 'who you know, not what you know' to get on in life.

Is that what you want a return to - the curtain twitching mentality, where people who don't 'fit in' are victimised by the self appointed local arbiters?

Personally I'd prefer to take my chances in a decision making process by some anonymous person at the central office who doesn't know who I am, or have any local prejudice against me, just the facts on the form in front of them.

You seem to forget that a 'dense social network of friends, family and colleagues' can be destructive as well as supportive.

Luis Enrique

yes, like Jim I am not sure the prospect of having my finances overseen by the local community is that appealing.

Felix Salmon was good on this topic I thought:



I really don't sympathise with all this hand-wringing over high-cost loans for the uncreditworthy.

If you have few or no assets, earn little or nothing and if your realistic furure earning potential is poor then of course credit will be expensive.

And it absolutely should be.

The scandal is that so many people cannot sustain themselves without such credit, which suggests that either their lifestyle expectations are unrealistic, their financial management skills are poor, or benefits are too stingy.

Personally, I'm not sure the CoE should be lending to the poor so much as giving to them.


A point I have made before is that people who get into serious trouble with the likes of Wonga have expenditure greater than their income. As Mr. Micawber has pointed out, this doesn't work, and a slightly cheaper loan isn't actually a fix.

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