This article is about the issues surrounding the African women who face the problems with micro credits. Micro credit refers to credit (loans) in small amounts to people who do not ordinarily have access to credit. It is delivered to poor people through micro-finance institutions (MFIs), which include a wide variety of organisations such as credit unions, financial non-governmental organisations (NGOs), informal savings and loan groups.
The imposition of micro credit leads to an increase in the injection of the circular flow. This is due to the impose of micro credit will increase investment, which are one of the components of aggregate demand. Therefore, these will impact on the aggregate demand curve by shifting the curve rightward (D1 to …show more content…
People who run small business, informal activities, sell on the street market, etc. These people might not be able to afford paying their debts from credits and these will lead to a social problems. When they cannot pay the money back, they are put under the pressure, their goods confiscated, and they can even end up in the prison. Moreover, the parents troubles with micro finance can be transferred over to their children and most of cases the children give up the school to help their parents. All of this bring psychological and social problems. Additionally, interest rates in micro credi schemes tend to be higher than market rates of interest on commercial bank loans. As a result, micro credit schemes alone, in the absence of the other anti-poverty measures will not solve the problem of poverty and enable the poor to escape the poverty …show more content…
Thus, the process of growth and development can help poor people to escape from the poverty. To break the poverty cycle, the intervention of the government is required. The government must undertake investments in human capital, physical capital in the form of infrastructure and natural capital.
The quantity of human capital can be increased by encouraging population growth or by increasing immigration levels. The quality can be improved by improving health care, education, vocational training, provision of fresh water and sanitation, and re-training for the unemployed.
Physical capital including factory buildings, machinery, shops, offices, and motor vehicles. Their quantity is affected by the level of saving, domestic investment, government involvement, and foreign investment. While their quality can be improved by higher education, research and development, and access to foreign technology and
The imposition of micro credit leads to an increase in the injection of the circular flow. This is due to the impose of micro credit will increase investment, which are one of the components of aggregate demand. Therefore, these will impact on the aggregate demand curve by shifting the curve rightward (D1 to …show more content…
People who run small business, informal activities, sell on the street market, etc. These people might not be able to afford paying their debts from credits and these will lead to a social problems. When they cannot pay the money back, they are put under the pressure, their goods confiscated, and they can even end up in the prison. Moreover, the parents troubles with micro finance can be transferred over to their children and most of cases the children give up the school to help their parents. All of this bring psychological and social problems. Additionally, interest rates in micro credi schemes tend to be higher than market rates of interest on commercial bank loans. As a result, micro credit schemes alone, in the absence of the other anti-poverty measures will not solve the problem of poverty and enable the poor to escape the poverty …show more content…
Thus, the process of growth and development can help poor people to escape from the poverty. To break the poverty cycle, the intervention of the government is required. The government must undertake investments in human capital, physical capital in the form of infrastructure and natural capital.
The quantity of human capital can be increased by encouraging population growth or by increasing immigration levels. The quality can be improved by improving health care, education, vocational training, provision of fresh water and sanitation, and re-training for the unemployed.
Physical capital including factory buildings, machinery, shops, offices, and motor vehicles. Their quantity is affected by the level of saving, domestic investment, government involvement, and foreign investment. While their quality can be improved by higher education, research and development, and access to foreign technology and