Economics

Study Notes

Micro Finance and Development

Level:
A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Although many of the broad approaches to economic growth and development are “top-down" in nature – for example an ambitious government strategy to increase productivity or attract foreign direct investment projects – there has been growing interest and investment in a bottom-up or grassroots approach to enterprise and innovation supported by the micro-finance industry

"A widely-held view is that small firms in developing countries are prevented from making profitable investments by lack of access to credit and insurance markets...One solution is to provide repayment flexibility in credit contracts. Repayment flexibility eases both the credit constraint, as it allows for increased spending during the startup phase, and offers insurance, in case of fluctuations in income

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