Trade Notes: Is it Worth the Trouble Investing in GB Debt?

I first looked into Grameen Bank (GB) almost 3 years ago.  A Deutsche Bank research report in 2007 got us interested in potential MFI (Micro Finance Institution) loan portfolio investments. Continue reading “Trade Notes: Is it Worth the Trouble Investing in GB Debt?”

Background: Grameen Bank’s Model Under a Foreseen Threat

Monte Dei Paschi Di Siena

Good old-fashioned partnership merchant banks lending out proprietary money is where banking started (hence the picture of Monte Dei Paschi Di Siena, the oldest surviving bank):  a partnership with long money to lend, taking the risk and the profits of new ventures from the next crop to the next shipload of whatever coming into port.

Modern banks are built around the concept of borrowing short and lending long:  borrow money short-term (from depositors or worse, short-term money markets) and lend long-term.  That’s where the image of the bank (and the banker) becomes critical.  Essentially, banks then become a legally sanctioned Ponzi Scheme: Continue reading “Background: Grameen Bank’s Model Under a Foreseen Threat”