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WEDNESDAY, NOVEMBER 25, 2009
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 OPINION 
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What Killed Bear, Lehman Is What the World Needs

Subprime loans bring relief to millions worldwide

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(Newser) – Sure, subprime loans toppled two pillars of American investment banking, gutted the world’s largest insurer, and plunged the entire US financial system into a tailspin. But they are exactly what the world needs today, Daniel Gross argues in Slate. “Far from the madding, depressed crowds of Wall Street, billions of people are starving for credit,” the columnist writes.

Small loans help fight worldwide poverty, but the trick is figuring out what borrowers can afford to pay back. “We need loan officers with a banker's head, a social worker's heart, and the stamina of a distance runner,” said one microlender. With new technologies that boost access to credit, nations only need to foster an entrepreneurial system—if America's hasn't scared them off yet.

Subprime loans provide working capital to budding entrepreneurs, usually women, given them small amounts of cash to buy items like sewing machines or livestock.
Subprime loans provide working capital to budding entrepreneurs, usually women, given them small amounts of cash to buy items like sewing machines or livestock.   (AP Photo)
Advocates are counting on technology to foster the widespread consumer access worldwide to credit that Americans take for granted.
Advocates are counting on technology to foster the widespread consumer access worldwide to credit that Americans take for granted.   (KRT Photos)
Subprime mortgages helped cause the current US financial crisis.
Subprime mortgages helped cause the current US financial crisis.   (Shutter Stock)
Providing small loans to people who live on just a few dollars a day can help combat poverty.
Providing small loans to people who live on just a few dollars a day can help combat poverty.   (Shutter Stock)
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Microfinance, which now touches the lives of more than 100 million people, is one of the few bright spots in the troubled financial sector. - Daniel Gross, Slate

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 Fed to Release 
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