EBK MACROECONOMICS
4th Edition
ISBN: 8220103648165
Author: KRUGMAN
Publisher: MAC HIGHER
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Question
Chapter 10, Problem 3QFT
To determine
Concept introduction:
Grameen bank: It is a type of bank established by Mohammed Yunus of Bangladesh. The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes the responsibility of a borrower if one gets into any difficulty
Expert Solution & Answer
Answer to Problem 3QFT
The effects of Grameen bank lending on community is very positive and beneficial. The lending has helped people in different aspects of life.
Explanation of Solution
The effects of Grameen bank’s lending on a community are as follows:
- Grameen bank functions are spread across more than 100 countries from the U.S. to Uganda, t. This has helped rural women to escape poverty by starting small businesses.
- It also provides flexibility in the process of lending and borrowing, by increasing the amount of security and making the asset easily convertible into cash.
- It helps in preventing those people who are casual employees and entrepreneurs from falling into the vicious cycle of poverty during bad financial times.
- The community has increased their income level due to the small loans offered by Grameen bank.
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