That suggests an easy path to a self-funding, virtual cycle out of poverty: a charity makes such "Vimes boot" loans where they get $20 to buy two years of toilet paper (instead of paying $5/week or whatever), charges some large amount of interest that's still much lower than the 200% effective rate, and uses that to keep lifting others out of poverty.

I suspect that the reason it doesn't work is that the theory is off. Lack of the initial capital (to bootstrap the virtuous cycle) is not the real bottleneck; it's the ability to commit to a plan where there is a big long-term benefit. Such a charity would run into the same problems as for-profit lenders and CCs -- not enough people paying back the money.

I imagine that some time ago, a community bank might have had loan officers who would know the person or at least the community personally. That would allow the bank to feel confident in writing a loan at lower risk than what the surface financial stats might indicate. Everything is now so financialized into homogenous trade units that I suspect that the original functions of banks to beneficially work out economic inversions like this have faltered.

On the other hand, the $200-300 being charged might represent a risk level of the whole class of rentals being made... it's hard to know without on the ground information.

The Costco membership isn't expensive to maintain (though, sure, even that can be a barrier.) Getting to Costco (which are fairly widely spaced) and transporting/storing the quantities of things that Costco often sells as the minimum quantity are probably bigger barriers.

Amazon also sells TP fairly cheap, and you don't even need a Prime membership if you order enough at once to get the regular free shipping.

Of course, using Amazon requires Internet access, which can also be a problem.

One thing I both do understand and lament is how the more impoverished communities are culturally tuned to turn on each other than work together. If your household is too poor to afford a lot of the things that are taken for granted - a working kitchen, for example - having four neighbors work together to have one working kitchen they could all share and set up time slots to use would go a long way to getting out of poverty.

But you really just cannot rely on other people in those situations. Its a prisoners dilemma where the prison is poverty. It takes one person taking advantage of cooperation to ruin it.

When you work 12 hour days 6 or 7 days a week, you have less tolerance for "bullshit" like when Steve didn't clean the communal kitchen that one time.

There's also the fact that if you can't afford to bulk buy a few extra rolls of TP, you sure as hell can't afford a quarter of a kitchen.

People seem to forget when they talk of the poor: "If only they invested in X, Y, or Z". The whole point of someone struggling financially is that they CANNOT invest, because they have zero, and often negative "extra" money. "Paycheck to paycheck" is not a euphemism, it's a literal situation. Even one missed hour of pay is devastating to these people.

> If your household is too poor to afford a lot of the things that are taken for granted - a working kitchen, for example - having four neighbors work together to have one working kitchen they could all share and set up time slots to use would go a long way to getting out of poverty.

Poor people who have close enough personal relationships to justify trust share resources all the time (source: spent several years in my late childhood in a family on welfare in public housing.)

Now, lots of poor people don't have close relationships with people with resources to share, and arms-length contracts with resort to the courts for enforcement don't work for them when personal trust isn't enough, because they can't afford the cost and delays of enforcement.

Storage and transportation of goods from costco is difficult as well. You need extra space in both a vehicle and your home. Difficult with a big family in a small house.