Night canteen @ spjimr boys hostel is a melting pot of various case studies. Jayaram operates this stall with dollops of enthu and oodles of knack. Kya Sir..kya chaahiye? Question is seemingly multiple choice. Only one answer fetches the highest marks and the fastest delivery. Butter Noodles! Jayaram has a happy process of making upto 4 plates of butter noodles in a deep pan. Khool entrepreneurial snack, this one...wonder who invented this. The Chinese connection points to TG :) More on that later. Oops! Didn't get my wallet! Hmm, well..I can see my roomie Nitin in the vicinity. Then there is NaM n GC...laughing n smoking repectively. So, we bail each other out when the money supply is low in the graveyard shift. This is our quasi credit union. Fulltoo non-profit. Very co-operative. The depositors run the show. Only that there are no formal deposits. As yet J I- don't-know-whom-to-pay-how-much. .. Well, I guess this is happening at all- india level too. High credit offtake. Low deposits :) Jokes apart, guys.. you would have read Praveen's mail regarding the benifits of such a pool account. Pour in your thots pls..
Know wot…Edward Filene discovered credit unions in a village in India in 1907. He had stopped in Kolkatta and met a government official who took Filene out into the countryside. There Filene first observed a village credit union in operation and immediately was interested. He had begun profit-sharing plans for his employees, instituted other novel fringe benefit programs, was the founder of the "bargain basement" idea in department store operation, allowed his employees to engage in collective bargaining and arbitration, established minimum wages for female workers, and advocated a five-day, 40-hour week. In the early 1900s, such ideas were revolutionary. Besides his creative approach to business, Filene was also one of the founders of the U.S. Chamber of Commerce.
Now this one is interesting…An inefficient credit market can make for a higher rate of savings and thus spur economic growth. In Italy, the average age at which people buy their first homes is 41. In the US and UK it is 28 and 29 respectively. In order to buy their homes, Italians have to save for many years, and then some get help from their parents or other relatives. Without such gifts or transfers Italians would have to wait another two years before they could buy a house.
One reason why Italy is so unusual is the way the mortgage markets work. Maturities of loans are relatively short – 10-15 years, and down payments are often above the legal minimum of 50% of the cost, itself a rule, which inhibits ownership. Fewer than 2% of mortgagees borrowed more than 60% of the total equity, and were able to do so only because of borrowing for repairs and additions.
So, it is said that “gifts are a poor substitute for efficient credit markets.” But they add, “On the basis of this finding, mortgage market imperfections remain a potentially powerful explanation of the high Italian aggregate saving rate and of its powerful correlation with the rate of economic growth.”
The results make for a fascinating contrast with the credit markets in the United States and Britain where borrowing is far easier and saving far lower. In recent years, however, the differences between growth rates in these countries and the traditionally higher Italian rate have changed and have even been reversed to some extent.
Pls do share your thots about macroeconomics and credit market imperfections...and what about our credit union???
c u soon,
Ganga
PGDSM MIT. Only Management can change the System.
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