The man is poor but honest
Saturday, 10 July 2010
Md. Main Uddin
WHEN I was s student of class seven, I was taught the above-noted English translation. Everything went well regarding this translation until I started reading different books on welfare economics and philosophy. As time passed by, I came to realize that the concept of this translation is wrong as well as misleading. When one says 'the man is poor but honest', it indicates that most of the poor people are dishonest and the very person to whom this translation is applicable is honest while he should be dishonest. This is misleading in the sense that those who learn this concept from the very beginning of their life would have a negative concept about the poor.
Money is one of the most sensitive and important variables that can be used to test honesty of the people. Banks are the principal financial institutions that deal with money and drawing examples from them the issue of honesty and poverty may be resolved. Loan default is a common term known to many of Bangladesh. There is a huge amount of defaulted loans in the banking sector of Bangladesh and most of the defaulters are the borrowers of large loans. The rich take large loans and defaulted ones come mainly from such loans. If there is any bad name arising out of this behaviour of large borrowers, they are almost exclusively liable to that. Thus, it is the rich people who take money from banks and do not give it back. They are also responsible for introducing the culture of loan default in the banking sector of Bangladesh. To make the situation worst, some took loans from the nationalized banks and established private banks by such loans without repaying them. The high default rate has originated from the non-repayment of loans by the rich.
On the other hand, the poor have access to small loans mostly provided by the microfinance institutions (MFIs). Their loan recovery rate is very high. The Grameen Bank, for instance, has the recovery rate of more than 90 per cent. The poor borrowers of these MFIs have proved that banks can bank with them and they always pay back. They also introduced Bangladesh positively to the rest of the world by their disciplined behavior.
Therefore, it can be uncritically generalized that the rich people are the principal loan defaulters and they do not care about the rules and regulations as they know the loopholes of them or they know how to break them. But the poor never think of braking the rules and regulations like the rich do. In the other areas of activities where corruption, irregularities, and indiscipline are pervasive, such generalization in favour of the poor that they are not dishonest is also applicable. Thus, the poor are dishonest, is an outright fallacy as the above arguments prove. Thus, let us stop saying 'the man is poor but honest' and start saying 'the man is poor but dishonest' or 'the man is rich but honest'.
(The writer, an Assistant Professor, Department of Banking, Dhaka University, is currently doing PhD on Microfinance at Tohoku University, Sendai, Japan)
WHEN I was s student of class seven, I was taught the above-noted English translation. Everything went well regarding this translation until I started reading different books on welfare economics and philosophy. As time passed by, I came to realize that the concept of this translation is wrong as well as misleading. When one says 'the man is poor but honest', it indicates that most of the poor people are dishonest and the very person to whom this translation is applicable is honest while he should be dishonest. This is misleading in the sense that those who learn this concept from the very beginning of their life would have a negative concept about the poor.
Money is one of the most sensitive and important variables that can be used to test honesty of the people. Banks are the principal financial institutions that deal with money and drawing examples from them the issue of honesty and poverty may be resolved. Loan default is a common term known to many of Bangladesh. There is a huge amount of defaulted loans in the banking sector of Bangladesh and most of the defaulters are the borrowers of large loans. The rich take large loans and defaulted ones come mainly from such loans. If there is any bad name arising out of this behaviour of large borrowers, they are almost exclusively liable to that. Thus, it is the rich people who take money from banks and do not give it back. They are also responsible for introducing the culture of loan default in the banking sector of Bangladesh. To make the situation worst, some took loans from the nationalized banks and established private banks by such loans without repaying them. The high default rate has originated from the non-repayment of loans by the rich.
On the other hand, the poor have access to small loans mostly provided by the microfinance institutions (MFIs). Their loan recovery rate is very high. The Grameen Bank, for instance, has the recovery rate of more than 90 per cent. The poor borrowers of these MFIs have proved that banks can bank with them and they always pay back. They also introduced Bangladesh positively to the rest of the world by their disciplined behavior.
Therefore, it can be uncritically generalized that the rich people are the principal loan defaulters and they do not care about the rules and regulations as they know the loopholes of them or they know how to break them. But the poor never think of braking the rules and regulations like the rich do. In the other areas of activities where corruption, irregularities, and indiscipline are pervasive, such generalization in favour of the poor that they are not dishonest is also applicable. Thus, the poor are dishonest, is an outright fallacy as the above arguments prove. Thus, let us stop saying 'the man is poor but honest' and start saying 'the man is poor but dishonest' or 'the man is rich but honest'.
(The writer, an Assistant Professor, Department of Banking, Dhaka University, is currently doing PhD on Microfinance at Tohoku University, Sendai, Japan)