Hacker News Reader

Comment by krtkush | Hacker News Reader

The general risk profile of people is increasing due to job loss in the current pandemic. Is it a wise time to launch a money lending feature right now?

I'm a noob at economics so please ELI5.

View on HN

If I were an investor I'd be worried... from a humanity point of view, I'm cheering this, in the developing world the governments aren't helping enough (some would argue, "It's the same in the developed world!") and day-wagers are probably going to starve to death[1]. A sudden line of credit would be a boon to help them survive.

But since a capitalist came up with this, it would not surprise me if the loan terms are horrendous and basically means they will be loansharks with slaves trying to pay off the loan in the future.

[1] https://www.theguardian.com/world/2020/apr/04/i-just-want-to...

>> day-wagers are probably going to starve to death[1]. A sudden line of credit would be a boon to help them survive.

If day wagers stay out of work how can they possibly earn the money or interest required to pay the short term loan? Most day wagers have already exhausted their savings. Debt on top of debt usually means starvation in these countries.

Well, a humane billionaire would just set very low interest and repayment terms of "when you can". In the end it would just be no different to charity. I wonder what's better, donating to the Indian version of food banks, or giving them money so they can buy food.

There are (were?) already microcredit websites where people in the developing world place loan requests like "I need a $500 loan to start a little shop", and a bit like Kickstarter, you can give them the loan, but also you accept this shop idea might not work and they would default on their loans -- and the site tells you this, so from your point of view the loan would become charity.

> slaves trying to pay off the loan in the future

I hope they won't and the gov will side with them.

Reply on news.ycombinator.com