The widely-held assumption has generally been that microfinance is an essential tool for reducing poverty in a society. However, this assumption has been based mostly on case studies and anecdotes and has not always been the case. Studies conducted by the Snodgrass and Sebstad, 2002 on behalf of the USAID on microfinance banks in different countries have shown that the impact of microfinance on net income gains of borrowers varies from country to country. One another widely held myth is that the institutions that offer microfinance must be making profits because there must be some sort of profit in it for them. It is also difficult to truly measu... ... middle of paper ... .... Journal of Development Economics, Vol.
S (2005) Micro finance is a form of financial development that has primarily focused on alleviating poverty and improving the living standard by providing financial services to the poor. Haroon and Jamal (2008) Most people think of micro finance as Micro Credit i.e. lending small amounts of money to the poor. Micro finance is not only Micro Credit, but it also has a broader perspective which includes insurance, transactional services and savings. When a person earn less than two dollar per day he will be considered poor or if a person income not sufficient to fulfill foodstuff for healthy and productive life is called poor.
This concept of micro financing has inspired a transformational movement that translated his vision into practical action for millions of workers in more than 100 countries. Many Bangladeshi w... ... middle of paper ... ...er to achieve social benefit and reduce poverty, governments also play a huge part. Governments should set strong, strict guidelines to allow companies start businesses in the developing nations, or else this will add onto the gap of the wealthy and poor. Examples of government intervention may include imposing high corporate taxes, and setting conditions on prices the companies’ charge on their commodities. As a result, micro lending, social business and government intervention can be connected together to bring to an end in world poverty.
The tax act includes deductions for business expenses and other tax cuts for small business owners. "By cutting individual tax rates and by delivering other incentives for investment in new equipment, 23 million small business owners will receive an average tax cut of $2,209" (Bush). This savings will allow small businesses to grow, which creates more jobs. Bush claims, "This law reflects a common sense economic principle: The best way to have more jobs is to help the people who create new jobs, and those are the small business owners of America." By starting new jobs the American economy is strengthened and encouraged to rebound.
There are many reasons for poverty in developing countries some of them include overpopulation, uneven distribution of resources ,lack of education, environmental degradation, economic trends, demographic shifts, high rate of unemployment, corruption, poor government or governance, prejudice and inequality, civil wars and natural disasters etc,. Reduction of poverty is the major concern of every developing country and even the developed nations. It can be reduced mainly by Economic Liberalization: Economic liberalization is protecting the property rights of the poor and according to the World Bank increasing the property right is one of the key factors in reducing the poverty. Increasing Capital, Infrastructure and Technology: Long Term economic growth can be achieved by increasing the human and physical technologies. Human technology is growth in the form of health, this leads to the economic development and in turn the reduction of poverty.
Introduction Poverty is the main problem of everywhere. For the last thee decades several developing and developed countries taken several steps to alleviate the poverty. In the world %?? (how much %) people are living life below the poverty line their daily or monthly income is less than $ xxx(how much) . One main step is the establishment of Microfinance Institutions which are providing micro credits to the poor people without any collateral.
Poor people, especially those in developing countries depend on their environm... ... middle of paper ... ...onmental sustainability but will also save on costs of having to acquire other resources. When we talk of environmental sustainability, we mean a system of life where we are able to maintain our environment without having to compromise with the resources of future generations and yet still manage to meet our own needs. Profitability brings about economic growth and stability to our society. This is why many businesses and government agencies are keen on making, profit and they end up misusing the environment. Profitability and environmental sustainability definitely can co-exist but when we get greedy, earth’s citizens, the economy and the environment would be in great danger.
They state that governments and donors should know whether the poor gain more from microfinance, than from more health care or food aid for example. Therefore, there is a need for all involved in microfinance and development to ascertain what exactly has been the impact of microfinance in combating poverty. Considerable debate remains about the effectiveness of microfinance as a tool for directly reducing poverty, and about the characteristics of the people it benefits (Chowdhury et al, 2004). Sinha (1998) argues that it is notoriously difficult to measure the impact of microfinance programmes on poverty. This is so she argues, because money is fungible and therefore it is difficult to isolate credit impact, but also because the definition of ‘poverty’, how it is measured and who constitute the ‘poor’ “are fiercely contested issues” (1998:3).
The costs of living in poverty are magnified by adverse outcomes like increased crime in low income neighborhoods, limited access to healthcare facilities for the sick, low productivity, etcetera (Gwendolyn, 2012). This reduces the ability of poor people to participate in productive economic activities, while the burden on welfare facilities increases. Human capital development is essential for economic growth where an empowered individual contributes to economic development through increased productivity and innovation. While the individualist ideology on poverty, to some extent, makes sense, poverty is much more of as a result of institutional failures than individual failures. Previously, efforts of poverty eradication have been focused on mitigating the effects of inequality.
Additional to that, they are also responsible for being the reason behind reforming the policies along and under the influences of the IMF and the World Bank. No escape for developing countries like Lapen, had to implement the policies as a part of their fundamental adjustment programs. Many developing nations are struggling with their already existing poverty and the other hand, debts, partly due to the policies and procedures of institution like the IMF and The World Bank.