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credit access in ThailandThailand, a country in Southeast Asia which borders the Andaman Sea and the Gulf of Thailand, is interestingly the only country in the region to not have been colonized by a European power. Generally speaking, during the last few decades, Thailand has been able to reduce poverty and bolster economic growth with low levels of unemployment and inflation and increased government spending. Credit access in Thailand has become relatively widespread.

A 2013 study conducted by FinScope revealed that 74 percent of the adult population had access to a bank account, with 23 percent using other formal financial services and only 1 percent using informal services. Thus, credit access in Thailand is considered to be quite inclusive and available. However, there are still improvements that can be made in regard to broadening financial access for the remaining 1 percent. Thus, financial inclusion and widespread accessibility do not necessarily account for the whole adult population spanning across all levels of incomes.

Thailand was highly affected by the Asian financial crisis in 1997 and this caused the Bank of Thailand and the Ministry of Finance to largely invest in stable, low-risk bank operations while tightening lending regulations, which evidently excluded the low-income populations working in the informal sector who were considered to be high-risk. Thus, the United Nations Capital Development Fund argues that the main area for improvement could be through widening access for insurance and credit products for various groups of individuals working within this informal sector.

There are several challenges to widening financial inclusion and credit access in Thailand, which include:

  • Limited access to credit for individuals living in rural communities due to proximity
  • The pervasiveness of informal credit services that are available
  • Individuals lacking the necessary documentation to comply with formal financial institutions, especially with an estimated 2.5 million undocumented migrants living in Thailand
  • Lack of literacy and financial knowledge

This has resulted in individuals and small businesses in Thailand having to resort to less credible and desirable forms of money lenders. Another major barrier seems to stem from the laws that surround commercial banks acquiring credit information. Currently, the law prohibits banks to inquire about a guarantor from the National Credit Bureau (NCB) even with consent, but instead, the guarantor must go to the NCB and then submit their credit information to the bank, which is inefficient and time-consuming for both parties.

The Asia-Pacific Financial Inclusion Summit held in October of 2015 outlined some policy recommendations to improve credit access in Thailand, which include:

  • Increasing options for distributing micro-insurance
  • Raising public awareness and support for the improvement of low-income households to interact with financial services through community-level financial education
  • Improving and shaping public policy in regards to financial inclusion.

Although credit access in Thailand has been steadily broadening, there is a portion of the population, albeit small, that is falling outside of this growing financial inclusive sphere. But with ongoing research by various institutions and an increasing awareness of this issue throughout the country, credit access will hopefully become available for everyone in Thailand.

– Miho Kitamura

Photo: Pixabay

Africa

The causes of poverty in Africa cannot be narrowed down to one single source. As a developing country, Africa has a lengthy history of external, internal and man-made forces at work to bring about the circumstances this continent suffers from today.

In sub-Saharan Africa, almost 220 million people, half the population, live in poverty. Worsened by the HIV/AIDS epidemic, cultural conflict and ethnic cleansing, Africa faces many challenges that directly correlate with its impoverished status.

Poor Governance

Poor governance, one of the major causes of poverty in Africa, involves various malpractices by the state and its workers. This malpractice has led many African leaders to push away the needs of the people. Having created the “personal rule paradigm,” where they treat their offices as a form of property and personal gain, these leaders openly appoint underqualified personnel in key positions at state-owned institutions and government departments. This type of governance affects the poorest people and leaves them vulnerable, as they are denied basic necessities such as healthcare, food and shelter.

Corruption

Corruption has been and still is a major issue in the development of and fight against poverty in Africa, specifically sub-Saharan Africa (SSA). SSA is considered to be among the most corrupt places in the world. According to a survey conducted by World Anti-Corruption, corruption in Africa is “due to the fact that many people in Africa believe that family relations are more important than country identity. Therefore, those in power use bias and bribery for the gain of their relatives at the expense of their country.”

Corruption costs SSA roughly $150 billion a year in lost revenue. While some countries in Africa, such as Ghana, Tanzania and Rwanda, have made some progress in the fight against corruption, there are still many lagging very far behind. A lack of effort to solve this issue only worsens the causes of poverty in Africa today.

Poor Education

Lack of education is also a serious issue that contributes to the causes of poverty in Africa. This absence is especially felt in sub-Saharan Africa, which has the highest rates of educational exclusion. Over one-fifth of children between the ages of about six and 11 are out of school, followed by one-third of youth between the ages of about 12 and 14. Almost 60 percent of youth between the ages of about 15 and 17 are not in school.

Education for girls has become a major focus of support groups like UNICEF, UNESCO and the UIS. With poor access to school, lack of sanitary facilities and social norms like female genital mutilation and child marriage, the right to women’s education is even less of a priority in impoverished communities.

However, education, especially girls’ education, has been proven to be one of the most cost-effective strategies for promoting economic growth. According to UNICEF, “studies have shown that educated mothers tend to have healthier, better-nourished babies and that their own children are more likely to attend school; thus helping break the vicious cycle of poverty.”

Healthcare

Poor healthcare is a major cause of poverty in Africa because the poor cannot afford to purchase what is needed for good health, including sufficient quantities of quality food and healthcare itself. With a lack of education on preventing infectious diseases like malaria and HIV/AIDS, as well as the costs of consultations, tests and medicine, people living in poverty are at a severe disadvantage that only perpetuates the poverty cycle.

With a strong fight against many forces still ahead of this nation, Africa must weed out the corruption and poor government, and promote strong education and efficient healthcare for all, in order to take a big leap forward in its development as a continent.

– Kailey Brennan

Photo: Flickr

credit access in MexicoAccess to credit and other financial services can lead to profound positive effects on the overall health and welfare of a country, but these services can often be hard to come by in developing nations. This makes it harder for people to start a business or borrow money when an unforeseen circumstance leads to a loss of income.

Mexico is an example of a country that has a lot to gain by increasing credit access among its citizens. Credit access in Mexico has a lot of ground to make up compared to its Latin American neighbors, but it has launched a comprehensive plan to increase credit access to its citizens.

Mexico has been working to improve its economy by increasing credit access to its citizens. A 2016 report by the National Banking and Securities Commission found that Mexico is trailing behind much of Latin America when it comes to credit access, especially among small- and medium-sized enterprises.

The World Bank reported that Mexico’s domestic private-sector credit as a percentage of GDP was 31.1 percent as of July 2016. By comparison, that figure is 109.4 percent in Chile and 69.1 percent in Brazil. Mexico’s banking industry understands the importance of increasing credit access in Mexico and has set the goal of increasing the country’s private-sector credit percentage to 40 percent by 2018.

In order to achieve the goal of increased credit access, Mexico has launched a National Financial Inclusion Strategy (NFIS). The World Bank estimates that this strategy can lead to an additional 29 million Mexican citizens gaining access to a bank account and other financial services. This has the potential to stimulate Mexico’s economy and increase its quality of life.

Mexico’s NFIS seeks to engage private banking, social welfare, public education, telecommunications and other industries in order to provide financial services to the 56 percent of citizens that currently do not have a bank account.

One of the important pillars of this plan is to increase education about financial services and how to use them. This will start with making sure that the subject is taught to children and youth as a part of Mexico’s public school curriculum.

The NFIS also seeks to use new technologies in order to make financial services more readily available. This will include increasing the ways that people can use mobile phones to access financial services and make digital payments.

While credit access in Mexico lags behind much of Latin America, the Mexican government understands that it needs to make improvements in this area. Through the country’s National Financial Inclusion Strategy, Mexico shows that it understands the importance of credit access in helping its citizens, as well as its national economy, thrive.

– Aaron Childree

Photo: Flickr

Education_women
Education is what’s in fashion for the girls studying at Studio Samuel, a non-profit founded by New York designer, Tamara Horton. Located in Ethiopia, this organization aims to alleviate poverty and empower girls and women through training in a broad range of life skills.

According to the non-profit’s website, women in impoverished Ethiopia are living in severe health, education and career opportunity deficits. The organization notes the following:

  • Only four percent of women in these communities have received health screenings.
  • Only 16 percent of girls will advance into secondary school.
  • 64 percent of the community’s unemployed are female-identifying.
  • Trafficking and child marriage often halt young Ethiopian women’s journeys to self-reliance.

In order to combat these obstacles to gender parity and poverty alleviation, Tamara Holton founded Studio Samuel in 2012. The goal was to teach young women life skills and instill self-esteem that can help create pathways out of poverty.

The centerpiece of Studio Samuel’s work is the Training for Tomorrow program, which offers a two-year curriculum for girls, ages nine to 18, that runs in parallel to their regular schooling. The instructors pull from materials vetted by United Nations-based agencies in order to best serve the students.

According to the World Health Organization, the “Ten Core Life Skills” for success include “the abilities for adaptive and positive behavior that enable individuals to deal effectively with the demands and challenges of everyday life.” The Training for Tomorrow program teaches these abilities as a way to help girls realize their potential and avoid falling back into cycles of poverty.

The classes include everything from computer programming, a valuable job skill in the 21st century, to self-defense, a skill which Studio Samuel sees as a confidence-builder in young girls.

When founder Tamara Horton isn’t working in Ethiopia, she is thriving as a fashion designer living in New York City. She owns a shop, designs costumes for Off-Broadway shows, and is a mother to her son, Niko Samuel, for whom her non-profit was named.

She came up with the idea for Studio Samuel when she first adopted Niko from Ethiopia. In an interview with the Huffington Post, Horton said that “[t]he seed was planted the first time [she] met [Niko]. I wanted to give back in some way and after seeing the struggles that poverty places on a family, particularly the girls, it was the place to start for me.”

The organization has seen enormous success since its founding. Approximately 94 percent of students in the Training for Tomorrow program saw improvement in their academics and/or behavior within six months of enrollment. In addition, there has been a 97 percent success rate in avoiding human trafficking and child marriage amongst students.

The philosophy behind theses achievement can be described by the adage “teach a man (or woman for that matter) to fish,”. Studio Samuel believes in an “empowerment without pity” model, one that imparts skills training to women and girls, instead of offering traditional forms of charity.

As Hilawi Alemayehu, the organization’s Country Director, said in an interview with The Huffington Post, “By creating together and not giving handouts, a foundation unfolds [that] may not have existed. It builds pride and accountability and once welcomed, it is extremely impactful.”

Jen Diamond

Photo:  Flickr