
The global indicator “Doing Business” ranks credit access in Paraguay at a not-too-shabby 122 out of 189 countries. The Western Hemisphere Credit and Loan Reporting Initiative stated that Paraguay‘s economy was ‘improving;’ still, the government’s 2014-2018 initiative, National Financial Inclusion Strategy (ENIF), identified two major issues it wishes to mitigate. Namely, it indicated that micro, small and medium enterprises (MSMEs) needed better access to approved loans and that 17 percent of the population had no access to a bank.
What is the ENIF?
The Paraguayan government — working alongside the World Bank and the FIRST Trust Fund Initiative — created the National Financial Inclusion Strategy (ENIF) as part of Paraguay’s National Development Plan. The main goal of this initiative is reducing poverty and promoting economic growth.
The strategy intends to achieve this goal by creating better credit access in Paraguay, as well as access to other financial services for the entire population. The project’s vision explains it best: “Quality and affordable financial services for all people in Paraguay who want them through a diverse and competitive marketplace.”
In order to achieve this vision, the initiative analyzes the issues with Paraguay‘s current state of financial inclusiveness by comparing the objectives to the gap of the “current financial profile versus the financial needs of the five primary income groups.”
It then creates a strategy for closing this gap by identifying the end goals — the ‘key performance indicators (KPI)’ — and a list of tasks to help achieve this goal. Working groups under each KPI then focus on completing these tasks.
Bank Access
About 69 of the 224 districts in Paraguay with more than 2000 inhabitants (17 percent of the population) have no access to banks, bank agents or ATMs because financial services simply cannot survive in an area with such a tiny client base.
This makes access to financial services for the population living in these rural areas very difficult, if not impossible, to obtain. For the two-thirds of this population that live in extreme poverty, this can also prove quite dangerous. Without access to credit, savings, or even government subsidies they can run out of money to buy food and are ill-equipped to handle an economic shock such as an illness or a death.
The ENIF proposes increasing the use of mobile phones and the coverage of mobile networks in the 69 “financially excluded” districts (with an emphasis on the 17 vulnerable districts) to provide those in need with access to money through mobile financial services.
By coordinating with the working groups in other KPIs, ENIF also wishes to provide such populations with access to financial services such as credit, insurance and savings. Along with this, the working group plans to create financial literacy courses and to design products and initiatives that encourage these vulnerable populations to save their money.
Loan Access for MSMEs
While 64 percent of 1.1 million MSMEs wish to have access to a loan, only 35 percent of MSMEs have had the ability to borrow in order to fund their operations. One-fifth of these firms reported not even applying for loans because they anticipated outright rejection.
To the ENIF, this indicates issues with business credit access in Paraguay and a need to improve the loan system. Improving such access will not only help businesses gain more capital for the country, but it will also improve job growth and increase access to opportunity for those in need.
The ENIF believes that credit risk systems of Paraguay’s main bank, Banco Central de Paraguay (BCP), and the collective savings and credit cooperative institution Instituto Nacional de Cooperativismo (INCOOP) should communicate with each other in order to create a collective credit information system. This partnership would allow for better monitoring of indebtedness and to ensure responsible credit is given.
ENIF’s Efforts
Along with this, the ENIF will also help in the creation of other regulatory measures such as:
- Speeding up the provisioning of micro-credit loans
- Establishing accuracy, timeliness, disclosure and recourse standards for all institutions
- Exploring the possibility of implementing factoring and leasing products on the market
- Monitoring, coordinating and implementing the progress of these KPIs through the Executive Secretary and Financial Inclusion Team. Each working group will send annual reports to the Executive Secretary and a measurement and evaluation system will track their progress
- Issuing a survey every two years to compare the rates at the individual level to those in 2013
Room to Improve
Hopefully, with a great coordinated effort, the ENIF will see the data of financial inclusion improve and with it, will also see a greater reduction in the number of citizens in poverty. Even with the economy resting at a decent place, a good government knows that its country always has room to improve.
– Elizabeth Frerking
Photo: Flickr
Solving Key Issues of Credit Access in Paraguay
The global indicator “Doing Business” ranks credit access in Paraguay at a not-too-shabby 122 out of 189 countries. The Western Hemisphere Credit and Loan Reporting Initiative stated that Paraguay‘s economy was ‘improving;’ still, the government’s 2014-2018 initiative, National Financial Inclusion Strategy (ENIF), identified two major issues it wishes to mitigate. Namely, it indicated that micro, small and medium enterprises (MSMEs) needed better access to approved loans and that 17 percent of the population had no access to a bank.
What is the ENIF?
The Paraguayan government — working alongside the World Bank and the FIRST Trust Fund Initiative — created the National Financial Inclusion Strategy (ENIF) as part of Paraguay’s National Development Plan. The main goal of this initiative is reducing poverty and promoting economic growth.
The strategy intends to achieve this goal by creating better credit access in Paraguay, as well as access to other financial services for the entire population. The project’s vision explains it best: “Quality and affordable financial services for all people in Paraguay who want them through a diverse and competitive marketplace.”
In order to achieve this vision, the initiative analyzes the issues with Paraguay‘s current state of financial inclusiveness by comparing the objectives to the gap of the “current financial profile versus the financial needs of the five primary income groups.”
It then creates a strategy for closing this gap by identifying the end goals — the ‘key performance indicators (KPI)’ — and a list of tasks to help achieve this goal. Working groups under each KPI then focus on completing these tasks.
Bank Access
About 69 of the 224 districts in Paraguay with more than 2000 inhabitants (17 percent of the population) have no access to banks, bank agents or ATMs because financial services simply cannot survive in an area with such a tiny client base.
This makes access to financial services for the population living in these rural areas very difficult, if not impossible, to obtain. For the two-thirds of this population that live in extreme poverty, this can also prove quite dangerous. Without access to credit, savings, or even government subsidies they can run out of money to buy food and are ill-equipped to handle an economic shock such as an illness or a death.
The ENIF proposes increasing the use of mobile phones and the coverage of mobile networks in the 69 “financially excluded” districts (with an emphasis on the 17 vulnerable districts) to provide those in need with access to money through mobile financial services.
By coordinating with the working groups in other KPIs, ENIF also wishes to provide such populations with access to financial services such as credit, insurance and savings. Along with this, the working group plans to create financial literacy courses and to design products and initiatives that encourage these vulnerable populations to save their money.
Loan Access for MSMEs
While 64 percent of 1.1 million MSMEs wish to have access to a loan, only 35 percent of MSMEs have had the ability to borrow in order to fund their operations. One-fifth of these firms reported not even applying for loans because they anticipated outright rejection.
To the ENIF, this indicates issues with business credit access in Paraguay and a need to improve the loan system. Improving such access will not only help businesses gain more capital for the country, but it will also improve job growth and increase access to opportunity for those in need.
The ENIF believes that credit risk systems of Paraguay’s main bank, Banco Central de Paraguay (BCP), and the collective savings and credit cooperative institution Instituto Nacional de Cooperativismo (INCOOP) should communicate with each other in order to create a collective credit information system. This partnership would allow for better monitoring of indebtedness and to ensure responsible credit is given.
ENIF’s Efforts
Along with this, the ENIF will also help in the creation of other regulatory measures such as:
Room to Improve
Hopefully, with a great coordinated effort, the ENIF will see the data of financial inclusion improve and with it, will also see a greater reduction in the number of citizens in poverty. Even with the economy resting at a decent place, a good government knows that its country always has room to improve.
– Elizabeth Frerking
Photo: Flickr
Top 10 Biggest Issues in the World Today
The world has several issues, but luckily it also has organizations and individuals ready to combat them every step of the way. The following are a list of the 10 biggest issues in the world we face today.
The 10 Biggest Issues in the World
Imminent Progress
The biggest issues in the world are critical, but not insurmountable. Many have seen concrete progress over the past few decades, and all of them have the attention of different groups and organizations working to improve them.
Continued awareness and effort can ensure these issues have a smaller impact on the world in the future.
– Mrinal Singh
Photo: Flickr
Reasons Impoverished People Come to the United States
Most Americans will never know what it is like to be forcibly displaced from their home country. Living in a place where there is no threat of violence is a luxury when compared to the hardships faced by many other people. For those who are not privileged, every day can seem like a struggle. The reasons for impoverished people coming to the United States are many.
Asylum-Seeker and Refugee
What is the difference between an asylum-seeker and a refugee? Refugees are those who have to seek safety in neighboring counties during times of war or other perils and are recognized by the International Law. Asylum-seekers, however, are migrants whose identity as a refugee is not recognized by their home country. Their reason for fleeing may be related to personal threats of violence and they have not yet claimed refugee status. These two can fall under the term “migrant”.
In the current political climate, a pilgrimage to the United States is a great risk. Therefore, it is important for the natural born citizens of this nation to align themselves with the reasons impoverished people come to the United States.
Top 10 Reasons Impoverished People Come to the United States
The above reasons for impoverished people to come to the United States will not only help American citizens empathize with their struggle but possibly look for ways to help them out. Embracing migrants is something that has been an enormous struggle for centuries in the United States, and while every immigrant’s reasons for leaving their home country may be different, their desire to build new, bright future is what brings them here.
– Tresa Rentler
Photo: Flickr
How the US Benefits from Foreign Aid to Azerbaijan
Since its formation in 1992, Azerbaijan has had positive diplomatic relations with the United States. The U.S. has affirmed its commitment to strengthening democracy in the region, as well as diversifying the economy and promoting regional stability. In 2017, the United States’ government gave $15.31 million in foreign assistance to Azerbaijan.
Over $4 million of that contribution went towards democracy, human rights and governance agendas. Another $3.63 million went towards economic development. Here are the four major ways in which the U.S. benefits from foreign aid to Azerbaijan.
Positive U.S.-Azerbaijan Relations Support American Jobs
Azerbaijan purchases American services. In 2010, Azerbaijan signed a $1 billion contract purchasing eight civilian airplanes from the American Boeing company; this contract supported 11,000 American jobs.
That same year, seeking to create its first communication satellite, Azerbaijan signed another contract with the Orbital Sciences Corporation in Virginia. The $205.3 million contract created 1,500 American jobs.
U.S. Companies’ Substantial Stakes in Azerbaijan Economy
Azerbaijan has welcomed U.S. investment in its economy. The Law on Protection of Foreign Investments allows for foreigners to directly invest in any activity of the Azerbaijan economy in which a national investor may also invest.
U.S. companies quickly capitalized on this opportunity. Many have long-standing investments in offshore oil development projects; however, experts predict a decline in this industry.
As a result, several U.S. companies are investing in other fields of the Azerbaijan economy such as agriculture, telecommunications, tourism and transportation services. The U.S. also regularly exports aircraft and heavy machinery to the region.
Azerbaijan: Useful Ally in Combating Terrorism
Azerbaijan has a confirmed commitment to combating terrorism. The country is a member of several international organizations such as the Organization for Security and Cooperation in Europe, and the Organization for Islamic Cooperation. The collaborative work of Azerbaijan’s State Security Forces and the Foreign Intelligence Service have made sizeable contributions to the international community’s efforts to combat terrorism.
Furthermore, as a member of the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), Azerbaijan has also taken steps to deter money laundering schemes that could finance terrorism.
Given this commitment, positive relations with Azerbaijan could help advance U.S. security goals in the region.
Successful Market Democracy Could Provide a Model for the Region
The primary objective of USAID contributions in Azerbaijan is “to support Azerbaijan’s reform processes by promoting competition and pluralism in the society, laying the foundations for a sustainable market-based democracy.”
As a Muslim-majority country with a history of religious tolerance, Azerbaijan could be a model for countries in the region. Azerbaijan shares a border with both Russia and Iran. If Azerbaijan can successfully become a market economy, perhaps it can provide a model for similar countries in the region.
How the U.S. Benefits From Foreign Aid To Azerbaijan
By providing aid to the Azerbaijan people, the United States is ensuring the continued economic and security cooperation with a proven ally. Though often overlooked by popular U.S. media, Azerbaijan’s development has a notable effect on the American people.
– Joanna Dooley
Photo: Flickr
5 Crucial Facts About Human Rights in El Salvador
The focus on immigration along the U.S. border has brought human rights of several Latin American countries into the limelight. A large portion of the migrants come from El Salvador — the smallest and most densely populated country in Central America. A large number of migrants is largely due to violations of women’s rights and gang violence throughout the country. Here are 5 crucial facts about human rights in El Salvador.
5 Important Facts About Human Rightsi in El Salvador
Reward Greater Than Risk
Human rights in El Salvador must be addressed and improved in order to ensure widespread safety. If violence decreases and improved rights are met, then the peoples’ quality of life overall will prosper and hardship will lessen. Fewer people will be forced to helplessly flee in search of difficult asylum elsewhere, and family members and familiarity will cease to be left behind.
– Jessie Serody
Photo: Flickr
Top 10 Facts About Poverty in the Philippines
Poverty in the Philippines is more persistent than in other countries in Southeast Asia. Consisting of 7,641 islands, the Republic of the Philippines is a country located in the western Pacific Ocean. Despite a declining poverty rate in recent years, 21.6 percent of the country’s population still live below the national poverty line.
Rural areas in the Philippines show a poverty rate of 36 percent in comparison with the 13 percent of urban areas. However, urban poverty has also shown a steady increase in recent years, possibly due to the unemployed and low-income migrants who are unable to afford housing.
Other key contributors to the poverty rate include vulnerability to shocks and natural disasters, an underdeveloped agricultural sector, high population growth and moderate economic growth. Here are 10 facts about poverty in the Philippines, including the causes, outcomes and improvements.
10 Facts About Poverty in the Philippines
The Republic of the Philippines has made and continues to make improvements in poverty reduction. However, overpopulated urban areas and lack of economic opportunities for rural populations still create a need for more progress. The fact that such issues are receiving recognition from political leaders and various organizations is creating hope for the Philippines and its people.
– Diane Adame
Photo: Flickr
10 Facts About Human Rights in Pakistan
Pakistan, cushioned between India and Afghanistan, is home to more than 212 million people and is the sixth most populous country in the world. Each one of these people living in Pakistan should be given basic human rights no matter their ethnic origin, color, gender, religion or any other reason.
Even if human rights should be granted to everyone, not everyone is given the same rights as the other in some countries around the world. There is much to know how each human is treated or could be treated in the country of Pakistan. Here are 10 facts on human rights in Pakistan.
10 Facts On Human Rights in Pakistan
Postive Push
While there may be progress budding in regard to human rights in Pakistan, the road to completely improved human rights will be long and difficult. If those pushing for their rights are heard and supported, the return of basic human rights and safety can return to Pakistan.
– Victoria Fowler
Photo: Flickr
Top 10 Facts About Human Rights in Guatemala
Guatemala is a tourist destination well-known for being the center of the ancient Mayan civilization. What many people may not realize about this small, Central American country, however, is that from 1960 to 1996, Guatemala struggled with a 36-year civil war that has left the country in a problematic state in regards to human rights. Although there have been several improvements to human rights in Guatemala, there is still work to be done. Below are 10 important facts about human rights in Guatemala.
10 Facts About Human Rights in Guatemala
These facts about human rights in Guatemala show that things have improved since the genocidal times of civil war, but many issues persist. The rights of indigenous people, journalists and minorities need more attention from the government. While Guatemala seeks justice for its past crimes with the aid of organizations like CICIG and Benetech, current human rights issues lack effective attention. With an improvement in economic opportunity and governance along with a decrease in impunity and corruption, Guatemala could significantly improve its human rights situation and experience a greater decrease in poverty and violent crimes.
– Matthew Cline
Photo: Flickr
How the US Benefits from Foreign Aid to Moldova
The U.S. government has invested over 1 billion dollars in Moldova since 1992 through various foreign aid assistance programs. In times where many Americans think that the government should concentrate on domestic aid, it is important that they should be informed about how the U.S. benefits from foreign aid to Moldova. So, how is the aid America invests in Moldova promoting American interest?
The Economic Benefits
Foreign aid is often characterized as an investment because it typically brings a return for the American people. This is especially true in the case of American businesses. In Moldova, the poorest country in Europe, the logic of foreign aid applies perfectly.
The stated goal of U.S. foreign aid to Moldova is to “target assistance at the country’s most promising economic sectors; which will help create economic opportunities that will raise incomes, promote job growth, and improve living standards.” By improving the economy and living standards, the foreign aid investments will then create a new market for American goods, demonstrating the mutual benefit for Moldova and the United States.
When the U.S. government provides aid for an impoverished country, the country’s economy improves, and typically so do the lives of its people. With this improved quality of life, citizens of the country are transformed from targets of charity to consumers with purchasing power. Instead of barely surviving, they become productive members of society, which results in new markets for U.S. companies. Not only does this create more potential customers for U.S. companies, but the increased demand for American made goods can create jobs in the U.S. to create these goods.
USAid in Moldova
USAID, America’s primary foreign aid agency, plays an important role in connecting American businesses directly with these new consumers in developing markets. USAID accomplishes this by encouraging American companies to partner with local people to help educate and support them on projects in local areas.
The result is the creation of a mutually beneficial relationship, whereby the target of the aid becomes self-reliant and also aligned with U.S. companies. In this way, the U.S. benefits from foreign aid to Moldova as well as Moldova itself.
Furthermore, the U.S. Embassy in Moldova implements programs such as The Cultural/English-Language Small Grants Program, to use education and cultural exchange to help foster mutual understanding between the United States and Moldova. It is the hope that this mutual understanding will lay the foundation for further economic, cultural, and political cooperation between the two countries.
National and International Security
Another common argument in favor of foreign aid is that this assistance helps stabilize vulnerable countries. This lowers the probability of future conflict and, as a result, keeps Americans safe. Syria is the most evident example of what can happen when a country becomes unstable. After the country experienced a drought in 2007, the resulting destabilization and actions by a repressive regime created the terrible crisis we see today.
This is the very reason that the U.S. foreign aid to Moldova targets economic growth in Moldova’s unstable agricultural industry as well as the consolidation of democratic institutions. If there were a slowdown in Moldova’s agricultural industry, which accounts for approximately 17 percent of its GDP, or a crackdown on democracy, the resulting destabilization could be problematic, especially given Moldova’s proximity to Russia.
Therefore, the U.S. benefits from foreign aid to Moldova by helping to minimize the risk of breakdowns in the critical areas of Moldovan society, which helps ensure stability, economic opportunity and pro-American sentiment in an otherwise vulnerable country.
– Taylor Pace
Photo: Flickr
Girls’ Education in Benin