GA Resolution: Microcredit and Microgrants

[Ananke II]

Microcredit and Microgrants
A resolution to reduce barriers to free trade and commerce.

Category: Free Trade
Strength: Mild
Proposed by: Glen-Rhodes


Description: BELIEVING that through focused initiatives and international cooperation, poverty and suffering can be ended,

NOTICING that microfinance allows the impoverished access to much-needed financial assistance,

The World Assembly,

DEFINES microcredit as the extension of loans for small sums of money, by lenders to those in poverty, for the purpose of sustaining livelihood and encouraging entrepreneurship;

DEFINES microgrant as a gift of a small sum of money, for the purpose of sustaining livelihood and encouraging entrepreneurship;

DEFINES solidarity lending as practice of lending microcredit collectively to a group of persons, to decrease risk for lenders by increasing the probability of debt repayment;

DEFINES a defaulted loan as one that the borrower has failed to make scheduled debt payments for at least a year;

DEFINES borrow insolvency as the inability of a borrower to make scheduled debt payments, after all reasonable payment plans have been tried;

ENCOURAGES nations to strive to eliminate poverty through microcredit, social welfare, and other forms of assistance directed at the impoverished;

ESTABLISHES the World Microcredit Foundation (WMF) as a global resource for microcredit lenders and the world’s impoverished person, which is tasked with establishing WMF chapters in willing nations and ensuring the safety and efficiency of microcredit by:
- Determining credible, honest, and fair microcredit lenders and authorizing such lenders to participate in the WMF initiative, a global effort to provide microcredit and stimulate entrepreneurship;
- Forming lending standards to which all authorized IMF lenders are bound, and routinely inspecting the practices and finances of authorized WMF lenders;
- Disseminating information about WMF lenders, the WMF initiative, and microcredit in general, to microcredit lenders and borrowers;
- Working with borrowers to ensure the repayment of loans;
- Reimbursing lenders the balance of the principle investment in cases of defaulted loans and borrow insolvency;

ENCOURAGES WMF lenders to practice solidarity lending, believing it to be a building block of successful microcredit lending;

ENCOURAGES nations with areas of large numbers of impoverished citizens to inquire about and establish IMF chapters in those areas;

ENCOURAGES credit lenders to research and participate in the WMF initiative;

ESTABLISHES the Microgrant Institute as a subset of the WMF and charges it with:
- Determining individuals living in extreme poverty who are too risk-averse to seek out a loan or have been denied access to microcredit;
- Reviewing applications and determining if those individuals genuinely require assistance;
- Distributing a microgrant to those persons, for the purpose of sustaining livelihood and encouraging entrepreneurship.

[Hockeynutville]

Can you spare a dime man?

[Anime Daisuki]

I don't know, the idea that Governments go into the business of lending/finance which should be carried out by the free market, just sounds odd to me. In our real world, the world bank and IMF lends to governments, not directly to citizens or businesses within a nation.

Another potential issue I can think of is enforcement.

- Working with borrowers to ensure the repayment of loans;
- Reimbursing lenders the balance of the principle investment in cases of defaulted loans and borrow insolvency;

All these are easier said than done. How do you enforce something like that, when the lenders and the borrowers crosses nations, some of them whom may reside in remote and inaccessible areas? How do you ensure the nation's police force or militia will cooperate and help you recoup a bad loan? Which reinsurer/assurance company would take up the risk and provide insurance for that kind of loan? There are a lot of problems to be ironed out.

It's a good idea, but I don't think it will work. Governments shouldn't get involved.

I'll vote for it if the proposal was just to promote public education and encourage microlenders to emerge (thru tax-exemption or other financial initiatives), but not those other tasks stated.

Abstain.

[Kanaia]

AGAINST
Lending money doesn't help eliminate poverty, in fact it does quite the opposite.

[Ananke II]

I received this tg from the resolution author, asking me to vote against.

The Commonwealth of Glen-Rhodes
New. 5 hours ago Hello,

I'm the author of the current World Assembly resolution at-vote, "Microcredit and Microgrants". I submitted it for a test run, to gauge how large of a campaign I would have to run. I did not expect it to reach quorum. Unfortunately, there are a couple typos that, in my opinion, destroy the effectiveness of the resolution. All references to "IMF" should have been "WMF". Because of this typo, the lending standards clause has no purpose, since there are no such things as "IMF lenders" (it should be "WMF lenders").

I implore you to vote against "Microcredit and Microgrants", so that the typos can be fixed.

[Guy]

Based on the above telegram, NAY

[Ananke II]

I don't see any reason not to follow his wish either, since I assume it'll be resubmitted, so cast my vote against in the poll as well.

[Wordy]

I will also vote as the author wishes......No.

[Eldine]

Apr 3, 2010 16:29:40 GMT -5 Kanaia said:

AGAINST
Lending money doesn't help eliminate poverty, in fact it does quite the opposite.

Exactly.

The Empire of Eldine votes AGAINST.

[Elite]

If the author wants to kill it then I will vote against.

[Ananke II]

Final tally: 3 for, 7 against, 1 abstain.

I've cast my votte against.