Wednesday, August 19, 2015

Africa: Mal-credit v Bene-credit

I've said much on mal v bene credit, but here is another example of avoiding the mal-credit.  Here a false dilemma is presented, without mal-credit your small business is disadvantaged.

Yes, small businesses thrive on credit, but bene-credit, in essence vendor financing at zero interest.
He explained that this years’ international Trade Expo taking place at the Uganda Manufacturers Association grounds in Lugogo between August 25- 27 will attract at least 1,000 private sector members and over 2,000 Small and Medium Entrepreneurs (SMEs) and link them to over 1000 agro processors and traders. “Traders will have access to chat with over 15 leading banks, foreign missions, and experts in trade related issues,” he said. 
Why Indians can come to Uganda and thrive is they brought vendor-financing with them.  They were ejected by Idi Amin, but if the Ugandans could embrace vendor financing bene-credit instead of paying usury to bankers, their economy would thrive better faster.  But that is not the modern way, I guess.

There is a difference between money and credit, and banks have abandoned lending the former for the latter. An economy needs both money and credit, but mal-credit is disastrous. Ugandans don't need mal-credit, they need patterns and practices in law that support bene-credit and a regime that treats interest like gambling debts, unenforceable in law.

Feel free to forward this by email to three of your friends.