Poverty and its hardships

Poverty is when you do not have resources to live. In severe cases you are on the verge of dying, in less severe cases you are broke but are not close death or starvation. This is bad as people in poverty tend to have more children as they seek money for having more children. In Hungary there are rewards for having more kids, this is an example of how people in poverty will seek to have kids to earn money. (In Hungary there are incentives to have kids to reverse a dwindling population, which mean is its a policy-induced population growth.) There are many reasons there is poverty and here are some: no access to clean water or food, conflict, no jobs, poor education, limited government abilities and lack of good infrastructure. These are just a few of the problems of poverty and some of them are hard to fix. Infrastructure is the core of a city for example like busses and public transport is all part of the city’s infrastructure, for example infrastructure is hard to put in and putting in a bad infrastructure will make more poverty since it weakens the economy.

A way to solve this by supporting those in poverty and helping them to get out of poverty this way they will able to maintain their own life without help. This also entails giving them education so they can have jobs. We can also micro finance those who are poor and lack resources and help them get back to working as banks normally do not lend to poor people since it is not a guarantee they will get their money back. This is because many small businesses fail therefore not having the ability to give the money back.

Micro financing is to give loans to small businesses in areas with poverty. This includes small businesses, individual businesses such as basket weaving. These are small businesses that do not have a guarantee of success so banks will not fund them. Doing this more often will help people in poverty as many of them do not have access to actual and proper banks. To be a micro finance it must be a little amount that is not over 2,730.73 US Dollars as this aims for small businesses to have a foothold in the industry. This would greatly help small businesses as most giants of the industry dominate the market thus making small businesses irrelevant.

However, micro financing has some problems since the interest in micro financing is higher than those of a bank. For example, a bank has an interest of 8% then a micro financing interest might be 20% to 25%. Another problem is over indebtedness this creates problems like that of people will have to pay amounts that are too high for them to afford on a monthly basis. This links to the interest; if the interest is too high and it climbs by 20% a year and a client is unable to pay this would accumulate fast as after a couple of years it would create a humongous amount if debt. There is also where micro financing gets their money from as non-governmental companies (NGC). These NGC’s will seek to earn profit creating interest problems furthermore they can only give money when they take loans from a bank, therefore it will only work if the banking companies agree to have them be business partners. Although micro financing has many major problems it can be helped by technology, as they can be easily fixed by use of lessening the interest or even having a non-profit organization.