Why do low-income individuals have trouble increasing their socioeconomic status? This question, of course, incites a plethora of valid responses, but the one I want to talk about today is the lack of access to capital. The poor often have either a low credit score or no credit score, making it difficult to obtain the capital they may need to pursue their innovative entrepreneurial idea, increase savings to the point where frictional unemployment to get a higher-paying job (or longer-term structural unemployment to obtain a higher education) is feasible, or even to provide better opportunities to their children. Microloans (also referred to as “microlending” and “microcredit”) are making debt capital more accessible to low-income individuals, thus making the journey out of poverty that much less difficult - especially for citizens of third-world countries.
Great to read about such an inspiring topic, looking forward to more good news!
Fascinating! This article is informative and well written.