Hearing Hugh Allen....

So exams over, summer is here and what am I up to? I have been going to hear various people speak including Jayz!


More interestingly though, a couple of days ago I went to hear the CEO of VSL Associates and what they essentially do is create savings groups so that funds are available for people in developing countries to make investments which is usually by starting their own small-scale product based business. 


I really enjoyed hearing him speak because I found him to be direct and simple. There was no unnecessary bombardment of facts, figures and fiddly vocabulary and actually I picked up some interesting facts that I thought I'd share with you. One was that usually when we discuss microfinance here is in West and see figures such as $50 we complain that these loans are tiny and question what productivity can actually be achieved with it. This criticism is usually baring in mind PPP and so I was interested to see what Hugh had to say. What he said is that actually the size of the loans is not the problem, if the size is a problem then it is that they are too big not too small. When loans are too big as many of us know, they become unmanageable and can actually make people worse off than better off. So I thought that was interesting.


Another things I found interesting that the demand for savings is greater than the demand for loans. Personally, I think this comes down to culture and custom. Many of the countries where village savings and loans are implemented are African and Asian. Being a student of SOAS, I can state with confidence that in these countries, culture and custom plays a critical role. As my favourite legal scholar Menski once said while describing the Namibian people that "it is in their bone marrow".  In these cultures, even to my own Indian community here in the UK, savings is important and not borrowing or spending above your means. It an embarrassment to your family, community and crucially yourself if you are found not able to manage your finances. So that is probably the most contributing factor behind why people are more inclined to save than borrow in these nations. (Although we must mention especial in India this is all changing with the Nouveau Riche that has been created.)


One of the reasons why I called this post 'Hearing Hugh Allen' because the ease and simplicity with which he spoke meant that it wasn't just a talk you listen to or in some cases pretend to listen to, it is one you actively are aware you are hearing and for that reason makes it all the more powerful!


More info - http://www.vsla.net/whoweare.htm    http://savingsgroups.com/