From Wall Street to microfinance: How corruption is seeping into the financial sector
Microfinance expert blows whistle on corruption
One whistleblower’s extensive knowledge of microfinance has effectively protected him against potential retaliation — even after publication of his book exposing scandals in the industry.
Hugh Sinclair’s book “Confessions of a Microfinance Heretic” discusses the corruption evident in the microfinance industry. Although praised by many from U2 singer Bono to Hillary Clinton, Sinclair’s research reveals the industry’s exorbitant interest rates and harsh collection tactics, Huffington Post reports. Money initially intended to go toward a business will go instead toward providing basic life necessities or paying off other loans. Loans from these microfinance institutions (MFIs) come with a hefty burden, sometimes charging interest rates of 100 percent or higher. Microfinance can be beneficial, but only if the lenders are more transparent and have accountability, Sinclair told Bloomberg Businessweek. Sinclair still works with honest microfinance agencies, but has published his findings in an attempt to shed light on those whose practices do not measure up to expectations.
“His goal is not to destroy the microfinance industry but to hold it accountable,” Huffington Post reports.
Although many whistleblowers experience retaliation in some form, Sinclair is effectively safeguarded from such because of his expertise in the field.
Some Wall Street folks admit they would cheat
Wall Street seems to be making a case for its need for increased oversight and transparency. Roughly a quarter of Wall Street executives surveyed said they saw bending or breaking laws as necessary to get ahead professionally. Five hundred Wall Street executives in the U.S. and U.K. responded to survey questions regarding observations and intentions of engaging in corrupt practices. Labaton Sucharow, a law firm focused on corporate responsibility and whistleblower protection, conducted the survey. Read more here.
Whitney is the summer Pulliam/Killgore intern with SPJ. She recently graduated from Brigham Young University after studying journalism. Connect with her via email – email@example.com – or on twitter – @whitevs7
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