Economic Development And The Microfinance Sector Essay

Economic Development And The Microfinance Sector Essay

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Africa gained his political independency more than five decades ago. Since then, the continent has struggled with extreme poverty and under-development. Many ideas have been raised and actions have been made to help Africa end poverty and promote the economic development of the continent. Among those ways of development growth we can cite: the formal economy, the microfinance, the green capitalism, the philanthrocapitalism and the social entrepreneurship. Each of these factors of development has their own and unique way of reducing poverty, and promoting social and economic development growth.

In our analysis below, we will focus more on the formal economy and the microfinance sector as factors of development. To best address our subject, some questions have been asked. What is the social and economic impacts or benefit of regulating the informal sectors? Why might development perspectives recommend the formalization of regularization of economic practices? What is microfinance? In what sense does it contribute to the development of Africa? Are we talking about development or finance when we talk about microfinance?

According to the International Labor Conference in 2002 where the informal economy subject was discussed, the term “informal economy” is attributed to:

“... all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements. Their activities are not included in the law, which means that they are operating outside the formal reach of the law; or they are not covered in practice, which means that – although they are operating within the formal reach of the law, the law is not applied or not enforced; or the law discourages compliance be...

... middle of paper ... economy benefits the African continent by securing his economy and protecting the labor while the microfinance fight to reduce poverty by encouraging small businesses and giving to low-income people access to credit, savings, insurance and other financial services. However, this new ways of economic development would always struggle and the economic development growth would not be successful achieved if the government of each country does not get involved and help. Thus, the responsibility of the government is to stabilize his taxes, ease the fiscal process and reduce the cost of formalizing activities. Create more job opportunities, create street spaces and markets for street vendors, support small businesses by offering to them basic skills training and legal advices, and also give to the lower-income population more access to credit and other financial services.

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