As we all know, access to credit is quite limited in Africa. Small and medium enterprises and most of the poor population in sub-Saharan Africa have very limited access to credit, as less than 20 percent of the population have access to formal financial services, with just about 5 percent getting bank loans. In Nigeria only about 2 percent of adults have got a bank loan. One reason for this is that the government and big oil companies are literally crowding out the market. The banks are apparently given out loans, but not to the average small and medium enterprise. This lack of access to financial services from the formal financial system to the people, is a primary reason why there could be an unrighteous economy in any country. As I have said many times and will continue to say, an unrighteous economy emerges when a significant proportion of the population are not participating meaningfully in the economy. These are mostly adults that are not in the labor force. That is, they are not employed and are also not looking for work. This kind of people can be very dangerous to economic progress because they are free radicals and can be captured by just about any ideology or quick opportunity. If access to capital is improved, the private sector can become more robust in the ability to engage this otherwise free radicals. The ultimate solution to poverty, unemployment and economic stagnation is a healthy, growing, and competitive private sector, where the real GDP growth rate is closer to 10 percent. Microfinancing can help. I am Magnus Kpakol, and that's my view.
Posted: Nov 22nd, 2017 @ 01:26:17 AM