Dollars and Jens
Sunday, October 15, 2006
A Hand Up, Not a Handout
Mankiw points to an essay by Yunus in the WSJ on why he prefers loans to hand-outs.

What I like most about the loans is the leverage it enables; if you lend $100, and get back 5/6 of that after administrative expenses (which are around what the Grameen Foundation runs), you can lend the $83 to someone else. Starting with $100, you end up with $600 worth of loans, even ignoring the other moral hazzard benefits that Yunus mentions.

(0) comments
Post a Comment

Powered by Blogger