Tuesday, September 30, 2008

Access to Credit

Last week, I received a letter from a credit card company that said it was reducing my credit limit to my outstanding balance. Effectively, this eliminated any emergency funds that our family could access in a serious situation. In the course of this realization, I thought of the several billion people around the world who live in this reality every day and have never had the luxury of a credit cushion for unforeseeable events. What do these people do when something unfortunate happens? Probably the same thing I'll do should the need arise: Call my family. Ask. Plead. Borrow.

Access to credit is an amazing privilege. When the DOW falls almost 800 points (as it did today) and access to credit is significantly restricted (as it is currently), we gain an understanding of the importance of credit. Thanks to all the MFIs (micro-finance institutions) who are making credit available and affordable to people around the world.

[Further reading: Banker to the Poor by Muhammad Yunus]
[Website recommendation: www.opportunity.org]

1 comment:

Bobby said...

Hey Bret,

I was talking to Ali this morning about this very issue. He relayed a story about his own father offering his customers store credit. After Amin, this practice was no longer viable.

As we talked about the current events in the American economic scene, I couldn't help but be impressed by the infrastructure of it all. . . even if it is unraveling right now.

Last week one of my friends (Jinja church guy and a night watchman at the house behind the Abneys) lost 400 of his 500 laying hens. The 80% loss has nearly wiped him out, and with no good systems of credit, he doesn't have many options. Our well-insured, credit-cushioned lives are far from the reality of billions.