ife, many countries experience poverty due to myriad social challenges in their economies that stem from the inability of their nationals to provide for their essential needs despite the availability of banking sector that was aimed to boost their financial and economic stability. There are many reasons for this problem and many solutions.
The main cause of this problem is social stratification, where the poor people are condemned into their poverty. The rich continue enriching themselves by using their power and authority while the poor continue being poor. Income inequality caused by social stratification, political issues and poor economic policies lead to increased poverty among the minority members of the society. In addition, this problem happens due to lack of information about microfinance and banking in the society. Information asymmetry leads to inadequate information by the members of the society which could be used to make appropriate financial and economic decisions in order to come out of poverty. Lastly, this issue is caused by governments’ inability to implement public policies effectively.
There are three primary solutions for this issue. The first solution is the government should establish effective systems of financial and economic empowerment. A country that has people that are development conscious can least find itself in situations of war and other forms of violence. Therefore, governments should create favorable policies that enhance business growth and peaceful co-existence among all people. In my opinion, economic empowerment is the only way that people can understand ways of identifying and providing solutions to social needs. Secondly, the government should create regulations to control financial markets so that they provide financial services effectively to all members of the society. For instance, the government should direct banks to lower their lending rates to small and medium businesses to allow them to invest and provide ...Show more