That is why in most countries poor people have no access financial services due to which these people cannot build up their income and assets and cannot come out from poverty cycle. There are some informal financial alternate like moneylenders, family loans and traders are usually restricted to a limited amount, mostly inflexible. It is necessary to help the poor and provide them sustainable economic opportunities at gross root level. MFIs provide credit facilities to poor people to start new business, improve micro or small business, house improvement loan, Employees loan, Livestock loan Agriculture loan to individuals and groups without any collateral. The amount of this loan in Pakistan is Rs 1,500/- to Rs 150,000/- equilent to 18$ to1800$.
There is great optimism as the growth of microfinance has shown that the poor are creditworthy, while the formal banking institutions serve only investment-worthy clients who are non-poor. However, to eliminate poverty, microfinance must be carried out in a sustainable way and cheaply, reaching a massive scale of the poor, with continuous improvement in the quality of service delivery. My study will therefore focus on the impact of microfinance in alleviating poverty in the rural Gambia. 2. THE RESEARCH PROBLEMS There has been a lot of emphasis on the importance of access to financial services by the poor and marginalized as a means of reducing poverty in many forms.
Introduction Microfinance is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and related services. Microcredit, or microfinance, is banking the unbankables, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient collateral. In general, banks are for people with money, not for people without.”. The goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance. The main aim of microfinance is to empower women.
It allows the poor to participate in services such as, credit, venture capital, savings, and insurance. The provision of financial services to the poor helps to increase household income and economic security, build assets and reduce vulnerability, creates demand for other goods and services for example education and health care; and stimulates local economies. 1.1 Definition. In the previous study of David Sloan (2013), Microfinance is providing small loans, primarily to women in poverty, and to who without collateral are unable to receive services from the formal financial sector. Generally, without access to capital, people cannot invest in activities such as existing businesses or new microenterprises, and it significantly reduces the chances of many to emerge from poverty.
Low wage workers are not adequately compensated for what they do, they benefit the American economy and the business owners but they don't even make enough money to support their families. Most low wage workers use the government welfare system. Businesses make huge profits off low wage workers while low wage workers struggle to make a decent living. After all the hard work that low wage workers do businesses don't sacrifice any portion of their profits to make their low wage employees self-sufficient. Most low wage workers use the government welfare system and also the government health insurance program.
Microfinance is about building permanen... ... middle of paper ... ...rganizations have also shown that the key to success lies in the evolution and participation of community based organizations at the grass-root level. 1.3.1 Micro-finance and Poverty Alleviation: Most poor people manage to mobilize resources to develop their enterprises and their dwellings slowly over time. Financial services could enable the poor to leverage their initiative, accelerating the process of building incomes, assets and economic security. However, conventional financial institutions seldom lend down-market to serve the needs of low-income families and women-headed households. They are very often denied access to credit for any purpose, making the discussion of the level of interest rate and other terms of finance irrelevant.
In Africa, people survive on using less than one dollar and twenty five cents per day. If they provide the everyday materials to survive with as little as one twenty five, those people are not treating themselves with the proper needs they need to survive. Ninety percent of the world’s people are chronically malnourished but they also have a lack of food supply (Sanchez 357). This is important because people play a huge amount on today’s society, if they die the world will never be the same. Not only is it hard for people to survive with little money but also with very little access to food, the odds of living a healthy lifestyle are very low.
The fact is nearly half of the poor populations of working age do work even if it is minimal and millions of them work full-time. The decline in wages is very hard on families with dependent children. Because of changes in our economic structure availability of well-paying blue collar jobs in manufacturing companies is limited. Most industries are outsourcing to other countries to minimize labor costs and using machines to replace workers. Therefore younger adults, particularly those who have very little education are forced to work in service oriented jobs for lower pay, no benefits and no chance for promotion.
People living in poverty or the working poor suffer from the lack of nutritional needs, resources and the poor conditioned shelters. The elderlies spends $167 per month just to live in an 1.5 square meter cage. Their lack of money has already brought them into the fact that they are not able to afford for a better shelter and yet they still have to pay for others t... ... middle of paper ... ...ted elderlies living in poverty. Wealth disparity is due to the enormous gap of poverty and wealth, there are wealthy families and yet there are also a lot of people suffering from the bad conditions of their living. The dangers of wealth disparity can be people living in poverty not able to live safely in their shelter and not meeting their nutritional needs daily.
Many countries in the world have a concerning percentage of poverty in which both food and financial sources are disturbingly limited. Most of the world’s poor have suffered from the deficits of using financial services. Because of a bad credit history or a lack of proof of employment, financial services are most often not accessible for the low income client market. In the western and developing countries, people are being eliminated by the traditional financial system based on the deficiency of guarantees of unaffordable costs to process the loan application, and the lack of data related to their credit history. These factors sometimes lead to borrowing illegally, and neglecting the regulation of lending.