Question

Topic #2 - Ethical Issues and The Developing World: Please choose one of the following issues concerning Ethics and the Developing World to write your essay: Corporate Social Responsibility Philanthropy Social Entrepreneurship Colonialism and globalism Poverty and poverty reduction as a sound business decision Microfinance Fair Trade Food versus Fuel

1000 word essay

Answer 1

Microfinance

Nowadays, Microfinance is a very successful business. The nature of business is to finance small entrepreneurs and individuals.

This business is very much successful in countries where population density is high. Especially in third world countries this businesses are very much successfull. Generally, the finance is given for personal need/operational expense for small enterprises. However, the interest rate is very high as the borrower of the money is a risky person to lend the money. The interest rate may be high as much as 50%-500% per year.

Microfinance has helped many individual to establish their small enterprises and it has contributed a lot to the GDP of a country. Microfinance is mainly popular in countryside rather than urban areas.

In a country like India Microfinance is very successful. India has a huge number of population who are below the poverty line. So, opportunity for business was huge. Microfinance companies not created fortune for themselves but also they have contributed a lot for the growth of India.