Women Are the Better Borrowers

Economic growth is driven by the decisions made by billions of individuals to save and invest, and borrow and lend. But most people are poor, have no credit history, and can't borrow from a bank. These peoplemany of whom are womencan, however, start a business, employ a few people, and earn an income with the help of a microloan. Microloans originated in Bangladesh but have spread throughout the developing world. Kiva.org and MicroPlace.com (owned by eBay) are Web sites that enable people to lend money that is used to make microloans in developing economies. Throughout the developing world, microloans are helping women to feed and clothe their families and to grow their small businesses, often in agriculture. As the incomes of microloan borrowers rise, they pay off their loans and accumulate capital. A billion microloans pack a macro punch.

a. What are the factors affecting the economic growth in Pakistan.

b. Why can or can't saving, investment, borrowing and lending affect the potential GDP?

c. How can microfinance be an efficient way of lending?