San Diego Microfinance summit

San Diego Microfinance summit was held in the University of San Diego (USD) on April 28, V/S Economic Development 10th edition by Michael P. Todaro and Stephen C. Smith We are going to analyze the roles that are (or are supposed) to be played by micro finance institutions in the economy. Our focus will be on the area discussed at San Diego Microfinance summit that was held in the University of San Diego (USD) on April 28, and we will be comparing them with our Economics book; Economic Development 10th edition by Michael P. Todaro and Stephen C.

Smith. In chapter nine page 453, the writer notes that “Through efforts to increase the income of women by providing direct access to credit and input has considerable successes” the writer seems to have the same reasoning with the organizers of the forum as they are advocating that the traditional barrier that has been in existence to deny a woman the access to credit need to be broken (Todaro and Smith 2009). The forum was encouraging the women to have a plan that will encourage them to access loans from the micro institutions.

The forum concurs with the writers when it notes that money is better managed by the woman than the man. They are the true managers. Empowering the woman according to the summit as well as the book should be a direct practice and should not be done through the man as the case has been. Another area that was discussed was the role that the institutions can play in eradicating poverty. Poverty has been seen as one of the contributor of high population growth rate, the uncontrolled growth rate than results to poverty and the process is unending.

To end the process the point of focus that was targeted is to improve the living standards of the poor people, this was through offering micro loans to facilitate what they do for a living; either farming or business. When this has been done then the tread will be reversed. The summit concurs with Todaro and Smith (2009) when they say that “thus certain development policies are particularly crucial in the transition from high growth to slow growth population. These policies aim at eliminating poverty; lessening inequality…”

One of the major sources of strain of urban resources is rural urban migration, this is because there is low rate of investment and jobs are scarce in the rural. Todaro and Smith (2009) in their recommendations on how to cure this note that “…. while investment in the urban areas can accelerate migration in cities; investment in agriculture can raise productivity and income making labor redundant…” The above concern and recommendation goes in line with the agendas and recommendations of the summit, that there is need to reverse this trend and the most efficient way can only be extending loans facilities to the rural areas.

It is important to note that one of the major hindrances of taking credit in the rural areas is the lack of securities; with the micro institutions it will be possible. The micro institutions will be providing loans to support the agriculture and reverse the tread. Empowering the youth is another factor that was considered in the forum. The angle that was taken is that, if through the various facilities available the parent is empowered so does the youth.

Their education should be strengthened so as to develop modern ways of earning a living. This is in line with the comment in the chapter page which says “To maximize the difference between expected benefit and costs (and thereby the private rate of return to investment in education), the optimal strategy for a student would be to secure as much schooling as possible” (Todaro and Smith 2009).

The other area that the summit focused on, is the area of empowering those people who have micro businesses, this is by developing a spirit of saving where one can get financing to expand the business that he is having, the recommendation was that the main interest of the lender should be focused on small traders who should be offered with necessary finances. The old system operated was in a way that the assets that one possessed limited the loan that he/she could get.

The above is in line with Economic development tenth edition in chapter page, “The goodwill of these relatives and friends of borrower represent part of borrower’s capital which failure to pay puts at risk” (Todaro and Smith 2009). This is the same ideology like the one discussed. The method of group lending was discussed as the way to assist the youth get finances for various small businesses. The other area that was discussed to be empowered is an individual talent development.

It was realized that some people have talents that they have not developed for lack of money. The institutions were asked to fund these talents even more so as to ensure that they became a benefit to the community. In ones talent the output is likely to be higher and this is in line with our book of consideration, although the book talks from a macroeconomic point it says,” Countries, like people, specialize in limited range of production activities because it is to their advantage to do so”.

(Todaro and Smith 2009). Reference Todaro, M. P. and Smith, C. S. (2009). Economic Development 10th edition: Chapter 6; Population Growth and Economic Development: Causes, Consequences, and Controversies . Prentice Hall Todaro, M. P. and Smith, C. S. (2009). Economic Development 10th edition: Chapter 7. Urbanization and Rural-Urban Migration: Theory and Policy . Prentice Hall Todaro, M. P. and Smith, C. S. (2009). Economic Development 10th edition: Chapter 9. Agricultural Transformation and Rural Development .

Prentice Hall Todaro, M. P. and Smith, C. S. (2009). Economic Development 10th edition: Chapter 8. Human Capital: Education and Health in Economic Development . Prentice Hall Todaro, M. P. and Smith, C. S. (2009). Economic Development 10th edition: Chapter 12. International Trade Theory and Development Strategy . Prentice Hall Todaro, M. P. and Smith, C. S. (2009). Economic Development 10th edition: Chapter 15. Finance and Fiscal Policy for Development . Prentice Hall Quotations 1. “….

while investment in the urban areas can accelerate migration in cities; investment in agriculture can raise productivity and income making labor redundant…” (Chapter 7 page 462) 2. Thus certain development policies are particularly crucial in the transition from high growth to slow growth population. These policies aim at eliminating poverty; lessening inequality…”CHAPTER 6 PAGE 304. 3. Chapter nine page 453, the writer notes that “Through efforts to increase the income of women by providing direct access to credit and input has considerable successes”

4. To maximize the difference between expected benefit and costs (and thereby the private rate of return to investment in education), the optimal strategy for a student would be to secure as much schooling as possible” Chapter 8 page 392. 5. The goodwill of these relatives and friends of borrower represent part of borrower’s capital which failure to pay puts at risk. Chapter 15 page 762 6. Countries, like people, specialize in limited range of production activities because it is to their advantage to do so”. Chapter 12 page 600