Microfinance shouldn't do the government's job

It is a requirement of civil society that government obviate the need for payday lenders, writes Carl Packman.

There has been a recent interest in microfinance as a means to draw vulnerable people away from the scourge of payday lending – an industry which saw its inevitable growth over the Christmas period, with the number of enquiries about it at the Citizens Advice Bureau doubling from last year. 

The Financial Times recently ran an article headlined Microfinancier gives payday lenders run for money. Reporter Sarah O'Conner discusses to what extent this type of financial product offers a fairer deal for borrowing money, with more manageable prices attached to loans: £162 on a 52-week loan of £600 compares well with the £25-30 per month you can expect to pay for a loan of £100 with the average high cost credit seller. 

Although relatively rare in the UK, the microfinance movement is over 40 years old. It all began in the early 1970s in Bangladesh and Latin America and since then has seen small but effective support around the world. 

I spoke to Saloman Raydan Rivas, a microfinance expert, about Professor Mohammed Yunnus, the don of the microfinance movement. Rivas told me Yunnus wanted to develop a banking model which did not take advantage of the poor, but he was unsure of how to tap into existing local lending mechanisms, such as self-financed communities, to bring about change on a wider scale. 

Today there are many people trying to realise his dream, and Fair Finance, the case studied in the Financial Times' article, is one. In fact Faisal Rahman, the company’s director, is strongly influenced by the microfinance movement, and hopes to bring it to market in the UK.

But there is something rather rocky about relying on private equity funding, as Fair Finance does (a fact not discussed in the Financial Times article) that makes me worry, both in practice and on first principles. 

Fair Finance was declined investment money by Barclays and the Royal Bank of Scotland when it first started out, and they even had problems with Santander, which would not put up investment alone. When I asked Rahman about it, he admitted it was a setback, and one could argue this is hardly a surprise. Rahman wants funding from investors to sell loans ethically to people, charging low interest, and risking low returns, all to realise a dream of creating a banking model that undercuts usurers and rip-off merchants. 

For all the good he wants, many investors clearly see the words “low return” and run a mile. In short, we cannot rely on the good nature of profit-making big banks to finance ethical, non-profit, lending schemes. But should we expect any private business to do this? Since it is in the interest of the public purse to keep individuals' personal debt profiles down, should ethical lending not be a standard expectation of the government? 

It is surely a requirement of a civil society that the government allocate enough money – for instance, through a credit union – to ensure consumers aren't left with going to payday lenders as their only option.

Having said that, I understand Rahman’s motives. Recently it was reported that a loans company who target personnel in the armed forces with high cost credit at 3,300 per cent interest was sold advertising space in Defence Focus, the magazine of the Ministry of Defence. Is this perhaps a sign of how relaxed public bodies have become about payday lending?

High cost loans for the armed forces has become a big issue. A representative of Waterhouse Baker, who offer financial advice to any serving member of the forces, told me that payday loans is often a short-lived solution, “as many default as the monthly expenditure is too high for the income gained”. 

Problems like these need solving fast, because the problem of high personal debt is one which affects the whole economy and the whole society. For me, the buck stops with the government.

Given the enormity of the problem of debt, government should be in charge of reversing it. So while the aims of Fair Finance and other similar organisations are positive, pricing out payday lenders should be chiefly the preserve, not of microfinance, but of the state as part of its commitment to maintaining a civil society.

Photograph: Getty Images

Carl Packman is a writer, researcher and blogger. He is the author of the forthcoming book Loan Sharks to be released by Searching Finance. He has previously published in the Guardian, Tribune Magazine, The Philosopher's Magazine and the International Journal for Žižek Studies.
 

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Just face it, being a parent will never be cool

Traditional parenting terms are being rejected in favour of trendier versions, but it doesn't change the grunt-like nature of the work.

My children call me various things. Mummy. Mum. Poo-Head. One thing they have never called me is mama. This is only to be expected, for I am not cool.

Last year Elisa Strauss reported on the rise of white, middle-class mothers in the US using the term “mama” as “an identity marker, a phrase of distinction, and a way to label the self and designate the group.” Mamas aren’t like mummies or mums (or indeed poo-heads). They’re hip. They’re modern. They’re out there “widen[ing] the horizons of ‘mother,’ without giving up on a mother identity altogether.” And now it’s the turn of the dads.

According to the Daily Beast, the hipster fathers of Brooklyn are asking their children to refer to them as papa. According to one of those interviewed, Justin Underwood, the word “dad” is simply too “bland and drab”:

“There’s no excitement to it, and I feel like the word papa nowadays has so many meanings. We live in an age when fathers are more in touch with their feminine sides and are all right with playing dress-up and putting on makeup with their daughters.”

Underwood describes “dad” as antiquated, whereas “papa” is an “open-minded, liberal term, like dad with a twist” (but evidently not a twist so far that one might consider putting on makeup with one’s sons).

Each to their own, I suppose. Personally I always associate the word “papa” with “Smurf” or “Lazarou.” It does not sound particularly hip to me. Similarly “mama” is a word I cannot hear without thinking of “Bohemian Rhapsody”, hence never without a follow-up “ooo-oo-oo-ooh!” Then again, as a mummy I probably have no idea what I am talking about. If other people think these words are trendy, no doubt they are.

Nonetheless, I am dubious about the potential of such words to transform parenting relationships and identities. In 1975’s Of Woman Born, Adrienne Rich describes how she used to look at her own mother and think “I too shall marry, have children – but not like her. I shall find a way of doing it all differently.” It is, I think, a common sentiment. Rejecting mummy or daddy as an identity, if not as an individual, can feel much the same as rejecting the politics that surrounds gender and parenting. The papas interviewed by The Daily Beast are self-styled feminists, whose hands-on parenting style they wish to differentiate from that of their own fathers. But does a change of title really do that? And even if it does, isn’t this a rather individualistic approach to social change?

There is a part of me that can’t help wondering whether the growing popularity of mama and papa amongst privileged social groups reflects a current preference for changing titles rather than social realities, especially as far as gendered labour is concerned. When I’m changing a nappy, it doesn’t matter at all whether I’m known as Mummy, Mama or God Almighty. I’m still up to my elbows in shit (yes, my baby son is that prolific).

The desire to be known as Papa or Mama lays bare the delusions of new parents. It doesn’t even matter if these titles are cool now. They won’t be soon enough because they’ll be associated with people who do parenting. Because like it or not, parenting is not an identity. It is not something you are, but a position you occupy and a job you do.

I once considered not being called mummy. My partner and I did, briefly, look at the “just get your children to call you by your actual name” approach. On paper it seemed to make sense. If to my sons I am Victoria rather than mummy, then surely they’ll see me as an individual, right? Ha. In practice it felt cold, as though I was trying to set some kind of arbitrary distance between us. And perhaps, as far as my sons are concerned, I shouldn’t be just another person. It is my fault they came into this vale of tears. I owe them, if not anyone else, some degree of non-personhood, a willingness to do things for them that I would not do for others. What I am to them – mummy, mum, mama, whatever one calls it – is not a thing that can be rebranded. It will never be cool because the grunt work of caring never is.

It is not that I do not think we need to change the way in which we parent, but this cannot be achieved by hipster trendsetting alone. Changing how we parent involves changing our most fundamental assumptions about what care work is and how we value the people who do it. And this is change that needs to include all people, even those who go by the old-fashioned titles of mum and dad.

Ultimately, any attempt to remarket parenting as a cool identity smacks of that desperate craving for reinvention that having children instils in a person. The moment you have children you have bumped yourself up the generational ladder. You are no longer the end of your family line. You are – god forbid – at risk of turning into your own parents, the ones who fuck you up, no matter what they do. But you, too, will fuck them up, regardless of whether you do it under the name of daddy, dad or papa. Accept it. Move on (also, you are mortal. Get over it).

Parenting will never be cool. Indeed, humanity will never be cool. We’re all going to get older, more decrepit, closer to death. This is true regardless of whether you do or don’t have kids – but if you do you will always have younger people on hand to remind you of this miserable fact.

Your children might, if you are lucky, grow to respect you, but as far as they are concerned you are the past.  No amount of rebranding is going to solve that. This doesn’t mean we can’t change the way we parent. But as with so much else where gender is concerned, it’s a matter for boring old deeds, not fashionable words.

 

 

 

Glosswitch is a feminist mother of three who works in publishing.