Very interesting discussion on microfinance going on over at Marginal Revolution, regarding what Sepia Mutiny's Vinod describes as a "thug function" in group loans in the village. The original post suggests that villagers in a group microcredit loans often resort to ruffian tactics to repo on an unpaid loan. Of course, there are many different kinds of microcredit loans and arrangements, some are more structured, some are less. But I am interested in tracking the shades of gray between the formal and informal economy.
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