Compartamos Usura? You bet we do!

"I'm going to make you an offer you can't refuse."

Here we bring you more on Carlos Saladrigas and the Cuba Study Group’s plan to “help” Cubans on the island by lending them money at rates as high as 105% APR.

Via Fox News:

The Cuba Study Group is a Washington-based organization of businessmen of Cuban origin who are seeking a peaceful reunification of the Cuban people within the framework of the rule of law and a market economy.

The CSG recommended that Cuban authorities learn the lessons of China, Vietnam and Singapore and support the development of small and medium businesses in the private sector as a way to achieve sustainable growth.

It also proposed the creation of a $50 million microloan fund for Cuban citizens who want to open small or medium businesses.

Let’s see: $50,000,000 x 105% annual rate of return = $5,250,000,000.

Apparently, maneuvering to place yourself in an exclusive position to make billions of dollars is defined by the Cuba Study Group as “helping the Cuban people.” And I am sure the Castro regime will not object to the extra cash this loan sharking scheme will put into their bank accounts, especially when freedom, democracy, and human rights for the Cuban people are not even mentioned.

Via Capitol Hill Cubans:

Yesterday, the Council of the Americas, the Cuba Study Group and ACCION International released a report entitled, “Supporting Small Business in Cuba: Recommendations for Private and Public Sector Leaders.”

(Never mind that there’s no private sector in Cuba, but that’s the subject of another post.)

Their joint press release can be viewed here.

In it, you’ll note that the words freedom, democracy or human rights are nowhere to be found. Why?

Because the report lobbies for a China-Vietnam model for Cuba — and as we all know, there is no place for freedom, democracy and human rights in China-Vietnam.

In other words, they’re fine with Cuba being ruled by a brutal dictatorship, so long as the people are granted some menial economic opportunities.

Is that what we should strive for in this Western Hemisphere, which is bound by the Inter-American Democratic Charter, and where 34 of 35 countries live under representative democracies?

Shouldn’t we be lobbying for the same freedoms — nothing more nor less — that every other country in this Western Hemisphere enjoys?


Of course, these types of business-friendly dictatorships are convenient to foreign corporations, opportunists and the regime’s economic elites, who cut deals while not having to worry about transparency or any “inconvenient” freedoms, e.g., to criticize, organize or lodge complaints.

Money often costs too much.

— Ralph Waldo Emerson, American poet, 1803-1882

4 thoughts on “Compartamos Usura? You bet we do!”

  1. This proves what a complete scumbag Saldrigas is.

    First, he’s got to know that giving people who have no idea how the banking/credit system works loans is quite risky. Thus, he’s got to know that many – if not most – will default. Now, he’s a shrewd businessman and I’m sure there will be provisions for defaults in loans.

    So then, who would put up the collateral for these loans? It certainly wont be a US government entity, and I dont think the not-for-profits associated therein have that capability. Which leaves us with only one entity with the ability to provide collateral for these loans: the Cuban government.

    And we all know the regime is broke, monetarily speaking, but – BUT – since they control everything in Cuba, they may very well vouch for these defaulting loans by giving Mr. Savior Saladrigas the proper collateral for same.

    And there are some very beautiful, very pristine, very undeveloped beachfronts in Cuba.

    id like to feel bad for the RDE and CAUSA kids, for theyre gonna learn a huge life lesson with all this. But, they have been warned and prefer to ignore those who know more than they do.

  2. Where does the 105% interest rate number come from? I’ve read the report and it says it will be run as a NFP. Yes there are for profit micro-finance lenders that charge excessive rate, but I do not see any indication to that here.

    I believe one of the requirements for micro-finance is taking a business and money management course.

    Those that know more than use have failed to accomplish anything in over 50 years. If we fail so be it, but at least we can say we did everything we could to see a prosperous and democratic Cuba.

  3. Sagua,

    The loans can have interest rates of 2% or 105%, either way, it doesnt matter. No business can prosper and be successful in an atmosphere of regulation and control. Cuba, for Cubans, isnt exactly business friendly, else we wouldnt even be having this conversation nor would they be needing loans.

    Also, I hardly believe a course or two will help someone who has no idea how finance, management and business loans work will be much help.

    As for the programs being run by NFP’s, so what. The powers that be know who greases the wheels, and will reward same as compensation.

  4. Caballero:

    Where does the 105% interest rate come from?

    Cuba Study Group — Summer 2007

    “In collaboration with Banco Compartamos, S.A. (Mexico), we will establish a micro-lending capability for Cuba to be immediately available as soon as permitted by Cuban law. The intention is to syndicate and fund an initial capitalization tranche of approximately $10 million, with a plan to obtain significant additional commitments. We intend to make these micro-loans available throughout all provinces.”

    Who is Banco Compartamos, S.A.?

    Business Week — December 2007

    “In 2000, Compartamos sought greater scale by becoming a for-profit, which led to the founding of the bank in 2006. Today it has a portfolio of $316 million lent to 765,000 clients, dwarfing nonprofit micro-finance organizations in Latin America. Fueled by annual interest rates that can exceed 100%, it is one of Mexico’s most financially successful banks, providing investors with an average annual return on equity of 53% over the past seven years.”

    Obviously you have not read Henry’s article from January of 2008 where he details all of this. I suggest you do.

    In regards to your statement in which you say that the fund will be run as a not-for-profit endeavor, that is incorrect. Nowhere in the report does it say that the fund will be a non-profit venture.

    Here is exactly what the report says regarding this proposed $50-million micro-loan fund:

    “The Cuba Study Group Microloan Initiative intends to raise a $50 million fund aimed at providing ordinary Cuban citizens with the capital to operate independent businesses. […] An internationally-recognized microfinance organization would be responsible for all the management and operations of the fund and would work with a local partner to provide oversight for loan collection and entrepreneur support.”

    As you can see, the Cuba Study Group only intends to raise the fund, not manage or administer it. Therefore, it is quite easy for them to go on and state the following:

    “The Cuba Study Group does not intend to make any money, gain an equity stake or benefit in any way from the fund. It would be a purely nonprofit endeavor with all interest reinvested to provide loans to more Cuban entrepreneurs.”

    Here we see that the CSG is stating that it does not “intend” to make any money from this fund itself, but it does not say that whomever is running and managing the fund will run it as an NFP endeavor. Of course CSG will not seek to make money or benefit from this fund; that would be a public relations nightmare for them. But it is a different story for the organization they choose to run the fund; they will make money hand over fist off the enslaved Cuban people. And no one will ever really know how those profits will be distributed and who from the CSG will benefit on a personal level.

    The devil is in the details, Caballero.

    In regards to your tired and tattered argument that our current policies toward the Castro regime have failed for 50 years, please be so kind and explain to me and all our readers how much success has the policy of engagement and dialogue with the Cuban dictatorship undertaken by Europe, Canada, the UK, and democracies in South America has had in helping the Cuban people rid themselves of the yoke of tyranny these past 20+ years?

    How much freedom has the tens of millions of tourists who have visited Cuba brought the Cuban people?

    How much of the billions of dollars these tourists have generated for the Castro military-run tourist industry has trickled down to the Cuban people who are not allowed in those tourist resorts and empowered them to make change in Cuba?

    Your argument that our policy hasn’t worked in 50 years would have much more weight if it were not for the fact that the opposite policy you suggest has failed just as badly, and worse, has only served to put hundreds of millions of dollars into the Castro family Swiss bank accounts.

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