Karteikarten
Microfinance and Fair trade schemes
Karten in diesem Stapel (10)
- 1MicrofinanceThis means providing extremely poor families with small loans to help them grow their business. It can help the poor to increase income, build businesses and reduce volatility to external shocks.
- 2Features>Micro-credit - Small scale loans to the poor
>Micro-savings - voluntary local savings provide by charities
>Micro-insurance - act as a safety net - 3Aims of Micro-finance-Poverty reduction
-Raising domestic savings
-Protection against income volatility (insurance)
-Sustainable finance
-Gender Empowerment - 4Benefits of Micro-finance-Safety net will encourage less averse behaviour
-Insurance can be a spring board
-Insurance can help smooth volatility in income and spending
-Reduces the burden of paying large sums for funerals
-Promote small scale savings - 5Criticism of Micro-finance- High interest rates
- Sustainable savings are more important in the long run - real incomes need to rise
- Direct cash transfer and direct funding skills training might have a bigger impact
-vulnerable to external shocks
- often used to finance consumption - 6Risk and Limitations of micro-finance-Asymmetric Information
-Vast majority have no access to insurance schemes and many needs to be educated about insurance
-Moral hazard - They might take on a risky investment as they know they will have the safety net - 7Fair Trade SchemesThey address the injustice of low prices by guaranteeing that producers receive a fair price. It means paying producer above-market price for their produce
- 8Reason for the fair trade schemes-It can correct multiple market failures. These include:
-Effects of monopsony power, it led to farmers receiving inequitably low and unsustainable price for their products. - 9Benefits of Fair Trade Schemes-Higher income and improve living standards
-Extra money spend on education, health, infrastructure and basic items
-Smaller price fluctuations
-Enable to diversify in other products (spread risk) - 10Criticism on Fair Trade schemes-Distortion of market forces
-Normative views
-No incentives to improve labour
- consumers are discourage by high prices
-create dependency trap for producers
Informationen
- Beschreibung
- A-Level Economics (Unit 4: Global Economy) Karteikarten am Microfinance and Fair trade schemes, erstellt von Mary Doria am 24/04/2016.
- Erstellt von
- Mary Doria
- Aufrufe
- 6
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