 all the members. Written records are available for scrutiny. It can form a new ethical base for interpersonal relationships. People who provide the funding for these loans consider this good social return on investment.
Group lending is extremely popular in Asia and Africa. It can be found frequently in Latin America. In Central and Eastern Europe, however, where I led establishment of several microcredit programs, contexts were enough different that a high percentage of the loans there are made to individuals, but with cross-guarantees from others in the community. In Poland and Ukraine, for instance, loans are to individuals but in a guarantee pool with three participants.
Also, as one moves up in loan size, it is common to move from lending groups to individual loans. This can be progressive with small loans in a group enabling someone to get established using credit to increase their income. Then, individual loans enable them to move up in scale. Ultimately, some go still further into the formal banking system and larger commercial loans. It is evidence of success when a borrower graduates from one level to the next or graduates out because she has enough retained assets that she no longer needs to borrow.
Orlando’s concern about whether a rigid group lending model might inhibit innovation is valid. Good microcredit programs often have more than one lending product and can serve a variety of needs. I strongly agree that no one should take a loan unless it benefits them. Generally, that is the case.
Prof Karnani, in your scenario about 500 women receiving individual loans for sewing machines versus one woman receiving a larger loan to set up a manufacturing plant, you have rightly described the advantages which economies of scale can produce. However, you have disregarded the distributional issues at hand. First, how is the one woman who will receive and administer the loan chosen? Does she have a powerful family or political connections? And second, even if the overall group of women is more productive, how will the profits of this production be distributed? Sweatshops are infamous for the great disparity present between workers’ wages and final retail prices. Is there not a role for micro credit to play in both the selection of top entrepreneurial talent that may be hidden at the bottom of the pyramid, and in giving workers better access to the profits of their labour?
Prof Aneel Karnani: I agree that there are significant distributional issues. First, we need well functioning competitive markets. This will help ensure that labor earns a “fair” return. So, we need to try to reduce entry barriers to setting up businesses; this includes reducing regulatory barriers, which often lead to corruption. Second, we need some regulatory safeguards for labour, such as unions and safety standards. Third, the government has a critical role in helping increase labor productivity by providing basic services such as public education and infrastructure.
It is a good idea to uncover the hidden entrepreneurial talent at the bottom of the pyramid. But, the amount of microcredit activity is way too much to be justified on these grounds. There are also other sources of capital for the “hidden poor entrepreneur”: loans from friends and relatives and informal capital markets.
The wages in sweatshops should not be compared to retail prices nor to wages in developed countries, but rather to wages in alternative employment (including self-employment) in the developing country.
Micro credit works with “loan-able” and “bank-able” people. It excludes grantable category e.g. aged, handicapped etc., Having worked as a practitioner for over 20 years, I strongly feel that the success of micro credit depends on the vibrancy of the financial sector in a given country. Now to my question: Can you outline ingredients for successful implementation of microfinance programs – at country level; institutional level; borrower level; community level?
Eric Thurman: Rajan is parsing the issue well. There are important differences between those who are “loan-able” and those who are “bank-able.” Also, deciding what type of intervention works best to lift people from poverty depends on what economic stratum they are at. Phil Smith and I discuss this in much more detail in our book “A Billion Bootstraps.” Here is a brief overview of the concepts.
If you look at wealth as a pyramid, those at the very bottom are ill, near death, severely disabled, etc. Such people are not economically active. They need and should receive humanitarian aid to sustain their lives. Moving up one layer, there are people who for a variety of reasons can improve themselves but are not yet ready for credit. Micro-grants and other interventions may be the best way to advance them. The organisation Technoserve comes to mind as one that uses that model. Another interesting group is CAUSE Canada that established financial literacy projects among communities that were exclusively barter previously and needed to learn how to use money before moving on to borrowing and business development.
You hit on a key reason for microfinance when you made a distinction between bankable and loanable. Historically, banks have only extended credit to people who have net worth to offer as collateral. Microfinance extends credit that is character-based. So a person with only the will and skill to have a business can also access working capital. This is vital because in the world’s poorest nations where the majority of the people operate within the informal sector of the economy. They depend on self-employment for survival. In countries like the Democratic Republic of Congo, only one person in thousands has a bank account. Microfinance gives them a chance to access financial services and begin working their way up the economic pyramid.
Finally, you ask whether these issues are best understood when viewed through a filter that looks at nations, industries, communities, etc? This is where Prof Karnini and I probably disagree. He seems to like looking at broad national statistics and forming opinions from those. I lean in the direction that I sense you are suggesting by your question. Formulate the intervention and measure success as close to the individual as possible. It is the old principle of whether poverty is solved best from the top down with large scale projects or bottom up by embracing the ingenuity and determination of the poor people themselves.
When will we see micro credit in the developed world? Is it an alternative to welfare?
Prof Aneel Karnani: Microcredit is not a good way to deal with relative poverty and unemployment in developed countries. An entrepreneur is a person of vision and creativity who converts a new idea into a successful innovation, into a new business model. Most people, and certainly most poor people, are not entrepreneurs in this sense of the word. We need other economic and social programs to deal with poverty in developed countries, such as welfare reform, retraining, relocation assistance, vocational education, etc.
Saucon Park closed; visitors explore other parks in Bethlehem.
They have everything to do with serotonin receptors, but like I said, they don't release serotonin or inhibit it's re-uptake, they simply mimic serotonin in the brain.

&gt;Psilocybin is rapidly dephosphorylated in the body to psilocin, which is a partial agonist for several serotonergic receptors. Psilocin has a high affinity for the 5-HT2A serotonin receptor in the brain, where it mimics the effects of serotonin (5-hydroxytryptamine, or 5-HT). Psilocin binds less tightly to other serotonergic receptors 5-HT1A, 5-HT1D, and 5-HT2C.[1] Serotonin receptors are located in numerous parts of the brain, including the cerebral cortex, and are involved in a wide range of functions, including regulation of mood and motivation.[81] The psychotomimetic (psychosis-mimicking) effects of psilocin can be blocked in a dose-dependent fashion by the 5-HT2A antagonist drugs ketanserin and risperidone.[82] Although the 5-HT2A receptor is responsible for most of the effects of psilocin, various lines of evidence have shown that interactions with non-5-HT2A receptors also contribute to the subjective and behavioral effects of the drug.[83][nb 3] For example, psilocin indirectly increases the concentration of the neurotransmitter dopamine in the basal ganglia, and some psychotomimetic symptoms of psilocin are reduced by haloperidol, a non-selective dopamine receptor antagonist. Taken together, these suggest that there may be an indirect dopaminergic contribution to psilocin's psychotomimetic effects

As opposed to something like MDMA

&gt;MDMA acts as a releasing agent of serotonin, norepinephrine, and dopamine (DA).[101] It enters neurons via carriage by the monoamine transporters.[101] Once inside, MDMA inhibits the vesicular monoamine transporter, which results in increased concentrations of serotonin, norepinephrine, and dopamine in the cytoplasm,[102] and induces their release by reversing their respective transporters through a process known as phosphorylation.[103]


Or an SSRI

&gt; SSRIs are believed to act by inhibiting the reuptake of serotonin after being released in synapses. How much an individual will respond to this, however, also depends on genetics. In addition, several other mechanisms are suggested for the desired effect, e.g. neuroprotection and anti-inflammatory and immunomodulatory factors. Taken together, SSRI has several advantages compared with tricyclic antidepressants (TCA)s and 5-HT-prodrugs. However, the latter might be required in addition to SSRIs in certain situations.Scott M. Quist has served as Chairman of the Board and Chief Executive Officer of the Company since September 14, 2012. Mr. Quist will also continue to serve as the Company’s President, a position he has held since 2002. He has also served as a director of the Company since 1986. Mr. Quist served as First Vice President of the