Wednesday, May 6, 2020

Microcredit The Solution to Global Poverty Essay

Over 1.4 billion people live on less than $1.25 per day (Singer 7). In impoverished nations, the life expectancy is below fifty, compared to the average of seventy-eight years in rich nations. The mortality rate of children is twenty times greater in â€Å"least developed† countries than in developed nations. Nearly 18 million people die every year from avoidable, poverty-related causes (UNICEF). On the other side of the spectrum, there were more than 1,100 billionaires in the world in 2007 (Singer 9). According to Singer, â€Å"[t]here are about a billion [people] living at a level of affluence never previously known except in the courts of kings and nobles† (9). Peter Singer insists in his book, The Life You Can Save: Acting Now to End World†¦show more content†¦An old Chinese proverb states: â€Å"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.† This wise saying applies to the act of giving aid to imp overished countries as well, as is currently demonstrated in many underdeveloped nations around the world, including Somalia: â€Å"Somalians need food and water right now, but what they need in the long term is the same as the rest of us: functioning market economies based on democracy and the rule of law, where they have trade and industry rather than tents and food parcels. Oxfam Ireland will never understand that, because they come from a background which takes the efficacy of aid as a given, rather than merely one of a number of options† (O’Hanlon). In addition, statistics show that nations that have received foreign monetary aid develop slower than those that have not, specifically because of a type of foreign aid called tied aid. Tied aid refers to aid that must be expended on exorbitantly priced products and services from the donor country (â€Å"How Aid Works (Or Doesn’t)†). According to Reality of Aid, foreign aid has failed to deliver real progress for the bulk of the poor. World Bank data reveals that, â€Å"the proportion of donor aid considered to be tied to purchases in the donors country is 58% while the proportion of aid tied to purchases is 32%.† African Business cites Frans Lammerson, an aid specialist with the OECD, who claims that [t]he mainShow MoreRelated Microcredit1734 Words   |  7 PagesMicrocredit can be defined as small loans, or microloans, for people around the world in extreme poverty to help spur entrepreneurship. The issue of microcredit is extremely important in the world†™s economy. Poverty alleviation and economic development are the primary goals of microcredit programs, that is why they began in the developing countries of Asia and Latin America, economist Muhammad Yunus and his Grameen Bank in Bangladesh are credited of pioneering this financial innovation (Smith, ThurmanRead MoreMicrocredit and Social Business1873 Words   |  8 PagesFrom Microcredit to Social Business: Towards Making Poverty History Innovative ideas are not standstill, when ideas works they create attraction and developed gradually that microcredit did. In the process of advancement, idea continue to change, newer ideas emerge, sometimes it may outdo the original ideas and very different from the expectations (Mulgan, 2006, p. 154). In the course of time, Grameen Bank own by the ‘poorest of the poor’ who are mostly women becomes a giant that now has 31 differentRead MoreThe Model Of Microcredit Lending2186 Words   |  9 PagesWhile the spread of microcredit as a development practice has enabled borrowers in many developing countries to access credit, not all experiences with microcredit have been positive. The original model of microcredit lending was not effective in alleviating poverty. To remedy this, an â€Å"improved† lending model was introduced; however, this model, too, has failed the impoverished citizens of the developing world because of its exclusivity. Traditional microcredit l oaning systems require some formRead MoreImpact of Microfinance Upon Developing Countries2315 Words   |  10 PagesQuestion: â€Å"Microfinance appears to offer a ‘win-win’ solution, where both financial institutions and poor clients profit† (Morduch, 1999). 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