Microcredit Isn’t Right for Everyone

litbonanza.jpgMr. Wile E. Coyote
Rural Route 99
El Paso County, Texas

Dear Mr. Coyote,

Further to our telephone conversation of earlier this week, please be advised that you are no longer eligible for assistance under the West Texas Development Fund.

This was not an easy decision. As the state’s first and only microcredit program, we are committed to entry-level economic development, and you—unemployed, with no collateral, no credit history, and no access to capital from traditional sources, but with a strong entrepreneurial spirit—appeared to be an ideal candidate for ground-up capacity building. Recent history, however, has proven otherwise.

Consider the results of your previous loans:

In 2005, you requested and received a loan of $1,000. According to the application, you were pursuing a career in blacksmithing and needed funds to cover start-up costs. Instead of following the detailed plan contained in your proposal, however, you immediately spent the entire loan on the largest anvil you could find. The very next day, you were admitted to hospital with what the accident report described as ‘anvil-related closed head trauma’. Exactly how you managed to drop a 550-pound anvil on your own head remains a mystery, but we were relieved when you made a full recovery.

In 2006, you requested and received a loan of $5,000. According to the application, you were seeking self-employment as a courier and needed funds with which to purchase a suitable vehicle. Instead of purchasing such a vehicle, however, you purchased a pair of “rocket-powered roller skates” (if the language of the invoice is to be believed). Not surprisingly, you soon found yourself back in the hospital with a jaw-dropping assortment of injuries. We were again relieved when you made a full recovery, but our confidence in you had begun to waver.

In 2007, you requested and received a loan of $3,000. According to the application, you were pursuing a career in blasting and needed funds to cover the cost of permits. Within days of receiving said funds, however, you had amassed a vast stockpile of dynamite, but no permits whatsoever. Your activities attracted the attention of the Department of Homeland Security, and you were promptly arrested and rendered to Egypt for two weeks of “enhanced interrogation”. We were relieved when you were released and allowed to return to Texas, but our confidence in you had been dealt a mortal blow.

Three loans, three defaults. Why such negative outcomes? We refuse to believe that the program itself is the problem. Microcredit has been a resounding success in some of the most disadvantaged places on Earth (seriously, there are people in Bangladesh who have used such programs to buy a single nail and a handful of rubber bands and have ended up owning tractor factories), so why not rural Texas? Frankly, we are stumped.

But there is a more serious consideration than mere monetary loss. Microcredit measures success not only in terms of money repaid, but also in terms of dignity earned and self-confidence attained. In these critical respects, our dealings with you have been unmitigated disasters. Indeed, each loan has left you more beaten, more broken, and more humiliated than the last. In all honesty, I fear that another loan may be the end of you.

Which brings me to your current request for a loan of $1,000, the precise nature of which is difficult to ascertain. The application form itself is illegible—except for the words “Die, you flightless bastard, die!” scrawled at the bottom, next to a crudely-rendered sketch of what appears to be a half-plucked bird of some kind roasting on a spit—and the supporting documentation is similarly inadequate. Whatever the merits of this request, it would have taken an extraordinarily cogent argument to convince us to continue our relationship at this point, and there is no sign of such cogency here.

In the result, we regret that it has come to this, but we see no alternative. For your own good, we will no longer consider any applications submitted by you or on your behalf, no matter how sound the proposal, no matter how small the amount sought. We hope you will understand, and we wish you the best of luck in all your future endeavours.

Yours truly,

Wayne Blalock

Director, West Texas Development Fund
El Paso, Texas

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Mike Richardson-Bryan used to be a lawyer, but he`s all better now. No, really. His work has appeared on McSweeney`s Internet Tendency, Yankee Pot Roast, Opium, The Big Jewel, and Cracked.com. He lives in Ottawa with one wife and two dogs.