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MicrofinanceMicrofinance is a model being applied in developing nations as a means of boosting local economies, with hopes of growing the global market.1 There are 2 billion people around the world who do not have a bank account, or lack the technology they need to access a financial institution, over 50 percent of which cite that their primary reason for not having a bank account is not having enough money.2 Microfinance institutions grant small business loans to individuals who would otherwise be unable to utilize a traditional bank services.3 They can also provide forms of insurance and savings accounts.4 An estimated 500 million individuals worldwide have received microfinance services,5 many are women from rural regions, accounting for 84 percent of microfinance borrowers in 2016.6
Economy OtherIncome inequality is very high across the world, and the top 20% of the world’s population control nearly 70% of the world’s wealth.1 The Gini coefficient refers to income distribution across a country; the higher the Gini coefficient for a country the higher the income inequality, and the lower a country’s Gini score the more equitably wealth is distributed in the country.2 Latin America is the region with the highest Gini score, indicating high levels of inequality.3 While Sub-Saharan Africa is also highly unequal, the region has reduced its Gini score by several points since the 1990s.4 The International Labor Organization estimates that nearly 202 million people are currently unemployed worldwide.5 In 2012 6% of the world’s total workforce was without a job.6 About 35% of Read More the world’s unemployed have been out of work for six months or longer, and 13% of the world’s population under the age of 24 is currently without work.7 The 2008 economic recession significantly increased the global unemployment rate, and in 2007 around 178 million people were unemployed, as opposed to over 200 million in 2014.8 Only 10% of the global population has access to traditional banking or means of attaining loans, savings accounts, credit, or other financial services.9 Poverty, service fees, and travel distance all inhibit over 2.5 million adults around the world from accessing banks or financial institutions.10 Microfinance is becoming an increasingly popular model in developing countries as a means of boosting local economies and the global market. Microfinance institutions enable low-income individuals, who would otherwise be unable to utilize a traditional bank, to attain loans for their businesses. The loans are then repaid to the individual lenders, rather than a bank.11 These financial services can lead to increased income, improved health, and improved education for many families.12 An estimated 500 million individuals have benefited from microfinance worldwide.13 However, the success of microfinance initiatives rests heavily on regulatory policies including interest-rate caps and pricing transparency to protect borrows from exploitation and exorbitantly high interest rates.14 1 http://www.unicef.org/socialpolicy/files/Global_Inequality.pdf 2 Ibid 3 Ibid 4 Ibid 5 http://www.theguardian.com/business/2013/jan/22/ilo-unemployment-numbers-rise-2013 6 Ibid 7 Ibid 8 https://www.gfmag.com/global-data/economic-data/worlds-unemployment-ratescom 9 http://www.forbes.com/sites/dell/2012/07/24/microfinance-as-a-tool-to-alleviate-poverty/ 10 http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20433592~menuPK:34480~pagePK:64257043~piPK:437376~theSitePK:4607,00.html 11 http://www.forbes.com/sites/dell/2012/07/24/microfinance-as-a-tool-to-alleviate-poverty/ 12 http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20433592~menuPK:34480~pagePK:64257043~piPK:437376~theSitePK:4607,00.html 13 http://www.forbes.com/sites/dell/2012/07/24/microfinance-as-a-tool-to-alleviate-poverty/ 14 http://www.theguardian.com/global-development-professionals-network/2014/oct/08/developing-countries-informal-economies-microfinance-financial-inclusion Show Less
Technological AdvancesA number of technological advances can improve access to communication, healthcare, trade, education and infrastructure in developing nations around the world. Mobile devices enable remote communities to access personal banking services and healthcare resources. Solar power can improve the reliability of a power grid in developing areas, and enable these same communities to access the internet through WiFi.1 The World Health Organization estimates that 91 percent of the global population had access to an improved water source in 2015, due in part to the construction of public wells and sanitation infrastructure.2 The UNICEF Office of Innovation establishes partnerships with engineers and producers of new technologies such as 3D printing, drones and mobile banking tools with a goal of scaling the technology to benefit large, undeveloped Read More and unreached communities.3 Show Less
Debt RecoveryThe average American ages 35–44 has $133,100 in debt, and the average citizen under 35 years old has $67,400 in debt.1 Nearly 800,000 people filed for bankruptcy in the United States federal courts in 2017.2 Medical debt is the primary cause of bankruptcy in the U.S. In 2014, an estimated 40 percent of Americans went into debt due to a medical issue.3 Thirty four percent of Americans have no savings, and 35 percent only have several hundred dollars in savings. Just 15 percent have over $10,000 in savings accounts.4
Fair TradeFair trade products provide fair pay, increased access to healthcare and education, and a sustainable environmental model for both workers and their communities around the world.1 In the United States, 1,250 businesses currently distribute fair trade goods.2 Since 1998, fair trade products have produced a cumulative $551 million of revenue internationally, and safeguarded the quality of land and water in communities across 45 different nations.3
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