Loan

It is hard for poor farmers and poor countries (like India for example) to repay money lent to them. Instead of repaying, they have to use their small resources to pay the interest. Rich countries do not think that poor countries are a good place for investment. They do not wish to lose their money. They prefer to lend money to industrial countries with many resources.

Banks and private lenders are unwilling to make funds available to a poor farmer who cannot repay his loan. But if no one lends him money he must remain poor. For this reason some governments now make funds available to poor farmers and not expect payment of interest or early repayment for the loan.

A poor farmer who obtains a loan from a rich money lender cannot improve his standard of living. He only contributes to the money lender's income and improves the money lender's standard of living. In fact he becomes the slave of the money lender and cannot get free. Some poor countries do not want to take loans because they prefer to remain independent; they do not wish to contribute to the income and power of the rich countries. It is probably unwise to take a loan, if this involves losing one's freedom.

A rich country should not make funds available to another country in order to gain power over that country. On the other hand a loan wisely given and wisely used can contribute to the improvement of a poor country's standard of living. Even if a rich country lends money to a poor country without expecting interest, this is a kind of investment. When the poor country improves its standard of living by developing its resources, it will be able to buy more goods from the country which has given help.