Microfinance Macro-Consequences

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Paradoxes abound in the English language; from comical ones like “jumbo shrimp” to more profound ones like “deafening silence”. But paradoxes are more than literary terms, they also exist in real situations as well. For example, one method of reducing world poverty seems to be an inherent paradox. When a country is impoverished it seems counterintuitive that one of the most desirable ways to alleviate large-scale poverty is by loaning money to the people. Despite this, microloans have improved countless economies in impoverished areas; most notably, in Africa and Southeastern Asia. Certain countries have received more attention than others and their situations have been used as models for further expansion of the micro-financial system. It seems that the positive effects of microfinance have been accepted as a given; yet, the extent and cause of their efficacy needs to be examined further. Microfinance, with an emphasis on loans to women, has helped lift the Bangladeshi economy.

Since it won its independence from Pakistan in 1971, Bangladesh, “Bengal land”, has more than tigers to worry about (National Geographic Society). The country`s exploding population fills the land with over 2,600 people per square mile, and makes subsistence farming, the main economic staple, difficult (National Geographic Society). The economy hinges on annual rainfalls and rice harvests; in the past, cyclones, earthquakes, and flood have severely damaged the country`s infrastructure and hurt its economy (National Geographic Society). But recently, the garment sector has grown in Bangladesh`s urban centers (Stanley St. Labs). These garment factories do not always offer equal pay or healthy conditions; in fact, over two-thirds of the people choo...

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Nawaz, Shah. “Microfinance and Poverty Reduction: Evidence from a Village Study in Bangladesh.” Journal of Asian and African Studies (2010): n. pag. SAGE Journals Online. Web. 14 July 2011. .

Rosenberg, Richard, and Focus Note. “Does Microfinance Really Help Poor People?” CGAP. CGAP, 2010. Web. 14 July 2011. .

Stanley St. Labs. “Bangladesh Economy.” Economy Watch. Stanley St. Labs, n.d. Web. 14 July 2011. .
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