Financial Crisis

The global financial crisis has been affecting many people worldwide. People are being laid off, companies are closing down and the cases of unpaid loans are increasing. The most affected is the garment and the electronics industry.  A group of countries has been formed to analyzed and formulate possible solution to save the financial markets. Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, Spain, USA and European Commission are among the members of this group. The group has been formulating possible solution to solve the global crisis that’s been affecting both the rich and poor countries. The team will work on the expanded Financial Stability Forum to make sure that every government will begin to plan their exit from direct market participation. The move will be followed by a re-launch of global economic growth and job creation.

Experts believe that this crisis will continue up to the middle of 2010. However, if proper approach and plan are being done then it will be resolve in a shorter period of time. Alternative job are given to unemployed who wants to work even if it has a very low salary wage. There are millions of people worldwide who are unemployed and without work for almost 6 months. According to experts the number of unemployed will be increasing until the mid of 2010. Just recently in the news a US resident killed his wife and daughter because of depression. He was removed from his job because the company has declared bankruptcy. People should start doing what is needed to be done.

Think Small Do Big: Capitalizing On the Poor

The ailing economy might be restored back to health by redesigning business structures that favour social development. According to Nobel Peace Prize winner Muhammad Yunus, founder of microfinance pioneer Grameen Bank, the solution to the growing numbers of unemployment is micro financing. Workers who lose their jobs would be hard put to obtain traditional loans. No big lending institution will trust them with their money. Through microfinance, they will be able to obtain, albeit paltry, money to start their own businesses. In his native Bangladesh his bank loaned almost $6 billion with 99% repayment rate.

Because banks cannot provide financial loans to people with low or no income, microfinance’s main goal is to provide financial aid to poor people in the hopes of helping them build assets and raise income. At the height of the global financial crisis, microfinance institutions were able to weather the bleak situation. For a microfinance institution to be successful in implementing its core values it should be transparent with their performance socially and financially. As well as credit, it should also provide savings and other services to their clients for its full potential to be realized.

The challenge for these institutions is to implement their social mission while maintaining profitability to keep them afloat. The most challenging phase is when they have to extend financial aid to the poorest sector of the community where basic infrastructure and needs are lacking. To be successful they should be able to address these obstructions by developing products and techniques to provide these people access to basic services like health insurance and technological innovations.

When the strength of microfinance institutions is fully established, with social and profit goals achieved, then the first step to having a much livelier economy is very well taken. If the big guns in the business industry are slowly folding then it is high time to set our eyes on the smaller prize.