MODERN CONDITION AND ROLE OF MICROFINANCE ORGANIZATIONS (ON THE EXAMPLE OF GEORGIA)

The financial companies have hold an important position in the Georgian financial industry, and for this reason, their regulation is an essential issue, which should continue at least in the same manner. In the developed countries the non-bank sector plays an important role in the development of financial sector as well as the whole economy, which we cannot say about Georgia, due to the obvious dominance of commercial banks in the country. The aim of our study is to identify the role of microfinance organizations in the financial system of Georgia, and also to show the current state of this market segment. The article is based on the newest references and rich factual materials. The object of the research is microfinance organizations and the degree of their regulation by the state. The National Bank of Georgia has a full authority to supervise the work of commercial banks, non-bank deposit institutions, microfinance organizations and other organizations, envisaged by the law. The majority of the institutions with microfinance organization status, registered at the National Bank of Georgia, are consumer finance companies with their content. Their work is absolutely legitimate, however, the issuance of the loans are based not on the customer’s finance analysis, but the evaluation of a subject or property, presented for the loan insurance, and the funds are not directed to finance the business, but for the customer’s needs. The financial companies have hold important position in the Georgian financial industry, and for this reason, their regulation is an essential issue, which should continue at least in the same manner. It is problematic that currently many financial companies, pawnshops, internet-lenders or private individuals that are left beyond regulations. There is no guarantee the customers› rights will be protected when the work of the financial intermediaries is not regulated. Such circumstances create a threat to the spread of predatory lending practices in the market, the victim of which becomes the unaware customer. The results show that it is important to take more active steps on the part of supervisory organizations to develop the segment of microfinance organizations, so as not to reduce their role and importance in the financial system.

Cause Determination of the Adjustable-Rate Mortgage Market Collapse During the Financial Crisis

This paper provides insight into what caused the decline of the adjustable-rate mortgage (ARM) market during the 2007–2009 financial crisis. Contrary to common perception, the failure of the ARM market cannot be primarily attributed to predatory lending targeting subprime borrowers from low-credit households. This popular narrative is incomplete and disregards some important factors. I present three key factors that challenge the narrative and point to previously undiscussed sources that may have contributed to the ARM market collapse. First, the accusation of predatory lending does not account for other possible causes of mass ARM defaults. Second, the sole focus on the market’s subprime segment disregards the impact of prime ARMs on the market. Third, the narrative’s citation of subprime ARMs having greater delinquency rates and foreclosure numbers fails to recognize the significant percentage increase in prime ARM failures in the years leading up to the crisis, as well the disparity in typical outstanding balances between subprime and prime ARMs.

The Road to Homelessness

This chapter examines what “causes” homelessness. It is not easy to parse out the specific interaction of personal, social, and structural factors that brings anyone's life to homelessness. In the stories of homeless people, one sees contributing individual circumstances and personal decisions, but there is also poverty, rent inflation, educational inequity, a low minimum wage, racism, homophobia, predatory lending, domestic abuse, an unaddressed national drug problem, and an uneven legal system. Beyond the multiple factors seen openly in the narratives are underpinnings, more deeply embedded in American life. These include structural changes in the U.S. economy that shipped factory jobs overseas; transformations in the national housing market; the lack of relative expansion in the government “safety net”; and, significantly, the pervasiveness of sociopolitical norms and attitudes that stigmatize the homeless in the policy sphere. The chapter then looks at the connection between mental illness and homelessness.

Loan sharking: changing patterns in, and challenging perceptions of, an abuse of deprivation

Background Illegal high interest lending or ‘loan sharking’ exploits the vulnerable and has profound negative impacts on individuals and communities. The 2008 UK financial crash and subsequent austerity programme coupled with changes in the consumer credit market have fuelled an increase in predatory lending. Methods The study is a descriptive analysis of demographic, financial, health and behavioural data on 753 victims (2011–2017). A review of the causative factors and potential political, economic and public health responses is analysed. Results Most victims were female but males were considerably more indebted. Illegal loans are largely taken out for routine living expenses and over 70% of victims reported other serious debts. Victims are disproportionately poor, unemployed and on benefits but fewer than half have had financial or benefits advice. Despite 90% reporting they would not borrow illegally again, 30% had previously done so from the same shark and over half considered them a friend. Conclusions The increase in loan sharking has coincided with the withdrawal of traditional sub-prime lenders and local welfare assistance schemes, and the low penetration of Credit Unions in many areas. Conventional perceptions of loan sharks and their relationships with victims are largely incorrect. A range of coordinated financial, political and social interventions is required.

Protest, Social Movements, and Spaces for Politically Oriented Consumerist Actions—Nationally, Transnationally, and Locally

This chapter discusses the relationship between social movements and political consumerism. Besides traditional consumer organizations that seek to protect customers from corporate abuse (such as unsafe products, predatory lending, or false advertising), political consumer practices have become increasingly employed to achieve diverse political and social goals. Calls to citizens to take action in their role as consumers have been made by social movement organizations of various types, either to build up transnational awareness so as to step up pressure on corporations or to facilitate the purchase of goods/services that meet specific ethical criteria. Along with large-scale boycotting and global fair trade initiatives, market-based actions have entered the repertoire of a number of local grassroots organizations seeking bottom-up solutions for sustainable development, within which the act of shopping moves beyond a form of individuals taking responsibility to become a tool for constructing collective, citizenship-driven alternative styles of provisioning.