Lack Of Credit Essay

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Our proposal seeks to facilitate the transfer of credit from people who are willing to provide such credit to those who are in need, especially those poor who make up most of the developing and non-developing economies of the world. Lack of credit is one of the major barriers preventing people from making the necessary investments to expand their means of livelihood. Our goal is to help encourage the growth of businesses, especially small and local ones. This can help alleviate poverty, by not just providing people with more means to sustain themselves, but by providing more meaningful employment.
In a lot of low income countries, like those of sub-Saharan African nations, many people, especially among rural populations, still engage in self-subsistence agriculture. And it is often the case that those engaging in self-subsistence agriculture live very precarious lives, precarious in the sense that they can barely make do with what little they already have. Even if they could support themselves, they may lack the means to further develop and expand their operations. This could mean local producers not being able to afford the technology or resource that can allow their labor to produce more output, or at least up to that amount which is sufficient to support themselves and their families. This could also mean local, self-employed retailers not being able to purchase finished goods and re-sell them in his or her own community.
The growth of local businesses can lead to increased employment as those businesses will have to hire more workers up to the point that the capital employed is being used efficiently. The credit transferred via our website can help businesses increase their capital, and therefore more employment. In the pla...

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...nnect to poor folks in poor countries, and help empower them to take advantage of their own resources and create their own markets.
Why should we help poor people receive credit in 3rd world countries? Are they trustworthy?
The main reason why poor people in developing and underdeveloped countries don’t have access to credit is because they lack income, savings or other assets that can act as collateral and hence are judged unworthy of credit by banking and financial institutions. That does not mean these people are failures. It just means that official lending institutions deem them not being worth the risk just because they have nothing to begin with.
In reality, they are worth the risk, as acknowledged by the United Nations. In one of their briefing papers, they cite a number of countries, such as Bangladesh, where repayment rates were as high as 97 percent.
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