It takes an unfathomably myopic worldview to read this article and just wave it off as “voluntary transactions” while conveniently ignoring the several disparities of exploitative economic power on display between the people making these apps, which are CLEARLY and blatantly taking advantage of people without the financial literacy of those raised in comparatively more developed economies and the people using them.
That's a more recent phenomenon in the US, which had usury laws in place in most states to prevent predatory lending. Payday lending was the province of the mafia in my lifetime.
In 1980, congress passed a law that neutered state usury laws, and prompted banks to change their charters and re-domicile in places like Delaware, South Dakota and Utah, especially for credit cards. The supreme court further weakened state regulatory authority in the 90s by defining fees as interest, and thus outside of the scope of state authority.
Wow, I learned my really depressing fact for the day. My knee jerk reaction is that usury should be outlawed entirely, though I suspect that would be harmful in other deep ways. Writing good laws is like writing bug free code I guess.
I think he's trying to say that even in the developed world there are people taking out loans with ridiculous interest rates, so that this phenomenon of taking out loans you can't pay isn't exclusively a "developing world" thing. Money Mart and the like come to mind, and I'm sure there are many other loan shark companies out there that do similar things.
I guess I don't recall taking the position that predatory loans was an exclusively developing world thing, but if something I said gave that impression, it's on me to be more precise with how things are phrased next time.
Comparatively speaking, more people in comparatively more developed economies tend to have more resources available to them to make informed financial decisions as individuals. I call this financial literacy.
The comment previously made was not intended to suggest these more developed economies are uniquely affected or affected somehow differently than say, for example, African nations (like the one in the article) are from predatory lending programmes.
And yet I’m not at all surprised to see it.