Latin American Regional Development Bank Micro-Crediting
There are currently about half a billion people living in Latin America. Of these people more than a 100 million people live on less than $2 a day, and more than 50 million live on less than $1 a day. Within poverty stricken Latin America about 50% of the regions GDP is produced by the less than 4% of the regions population. Latin America is enriched with natural resources for production, which could be financed on a large scale in order to boost and industrialize the economy.
Within the region most of these resources are in the control of small businesses. These businesses are the ones run by the poverty stricken people in these small villages throughout the region. By functioning with minimal employees and resources these businesses are barely able to bring in a suitable profit, yet are the missing backbones to Latin America’s economy.
In Latin America over 50 percent of new jobs produced is that of labor-intensive small businesses. Though, there is opportunity for Latin America to move towards utilizing its enormous potential to become an engine of growth, and to reduce poverty. Through supporting and funding small businesses and entrepreneurship Latin America’s regional economy would stabilize and have steady growth. However, in order to do this micro crediting and loans are needed. Through micro crediting very small loans are distributed to the poverty stricken who can’t apply for normal loans due to their poor crediting. Numerously, micro crediting is designed with the purpose of expanding small businesses and encouraging entrepreneurship. By distributing loans in amounts such a $10, a bank is able to assist a farmer in starting his business by lending him money to get tools and supplies.
However. micro crediting hasn’t been widely applied throughout Latin America in the past. As a result of this there has been a lack of regional cooperation and disunity due to each countries financial difficulties.
By creating a Latin American Regional Development Bank (LARDB) we can conduct micro crediting and financing at a large scale throughout the region, allowing the region to utilize all its resources and potential, which will at the same time reduce poverty. It is time that the Latin American region revives its economy and fight poverty and disunity to the fullest extent.
Helpful Sites:
http://www.iadb.org/topics/topic.cfm?id=MACR&lang=en
http://www.ethicalcorp.com/content.asp?ContentID=4745
http://lanic.utexas.edu/la/region/business/
http://www.latinbusinesschronicle.com/app/article.aspx?id=1347
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