In this chapter, statistics are primarily used as a tool to analyze social behaviors as they pertain to MFIs. For instance, one of the more intriguing stats at the end of the chapter is how a 10% increase in loans leads to 9% increase in profits for the loaner. However, they also say that this requires the loans to be paid off and said that due to several events, 70% of the loans remained unpaid. They claimed that these stats were caused by people losing confidence in paying the lenders due to things such as local newspapers leading to a complete lack of trust. The authors made the claim that since no one else was paying, the entire system essentially collapsed.
This certainly makes sense and does have some evidence thanks to the statistics. However, one of the issues I had with the piece is that since behaviors were so easily influenced by other people, I have to question why it’s so difficult to restore confidence in the lenders. According to the book, confidence was mainly shattered through bogus reports in local papers and that was enough to completely break the trust of the population. So why does the book make it seem like its nigh impossible to restore confidence? If the population is so easily swayed one way, why can’t they just find some way to restore confidence by using local papers, politicians, or even grassroots organizations to improve confidence?