I’ve been googleing but I’m trying to pull myself out of a rabbit hole. I don’t see these institutions prominent in my country – where are they? And the pros and cons of them seem to be in theory? Like there aren’t news stories accompanying them
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At the beginning, the people applying were very carefully screened to make sure the loan would be used to start a small business.
Then after they started to get more popular, more people got loans, used them like a credit card to buy things, and simply had no way of paying them back. Some people even got a loan simply because it was a status symbol. So they are becoming more of a debt trap. They can be dangerous.
The devil is in the details. What is the approval process, and how many of the loans are paid back on time?
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