Loans have become such a nasty tool to propagate the current system, keep it alive artificially. In personal experience, 80% of the loans taken by friends (not family, we check loans very thoroughly) don't make sense. They're for consumerism, bad business ideas or other expenses that will not add, but subtract value from their lives.
The max here in Ecuador is 30 years. That's reasonable, but still a long time. In a culture without much interest in forward thinking (and seemingly no capacity to do so), 30 years might be like 105 years. Money now, worry later, whatever.
It's not about the idea anymore. Probably never has been? About the business it could spark. The future a loan could give, adding to the whole society. No matter how bad the idea, how unnecessary the expense - if there's a slight chance of getting the money back with interest, here's your loan.
It reminds me a lot of movies of gamblers and the loan sharks. It's not that much different in the legalized system. You might not get your legs broken or be killed, but you'll get stripped of everything, never to recover. Economic legs broken, financials killed.
And it keeps people paying. No one wants the stigma of being an economic outcast in a society that only values financial ability.