Microloans often have lending groups where there are around five people who lend get a credit.
No one of them will get again a credit from the lending instiution if one of those five people doesn't repay.
That creates social pressure on people to repay.
Sometimes those groups are also ways to trade knowledge and people get more than the money but are also told in those groups about what it takes to make a business.
You should also keep in mind that people who get Mircroloans generally don't have anything that you could take away from them in the event of them not repaying the loan.
The social pressure created through the other people in the support group getting no new credits is the primal thing that gets people to repay. It also sometimes get other people in the group to repay the loan.
There no legal system that enforces those loans.
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My posts generally don't contain medical or legal advice, if you have a problem seek the opinion of an expert Talking about this in terms of “bad news” or “bad judgment by business leaders” seems archaic. It’s like describing World War One as “a serious diplomatic concern.”
Bruce Sterling about the financial crisis.
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