StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Economic Consequences of Credit Market Failure in Uganda - Term Paper Example

Comments (0) Cite this document
Summary
This paper is a blueprint for the consequences of the failure of credit market failure on the growth of the Ugandan Economy. It contains practical and suitable recommendations for the stabilization of the Ugandan credit market according to the Economic, Regional and Social set-up of Uganda…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.7% of users find it useful
Economic Consequences of Credit Market Failure in Uganda
Read TextPreview

Extract of sample "Economic Consequences of Credit Market Failure in Uganda"

Download file to see previous pages "The failure of formal credit institutions to serve the poor is due to a combination of high risks, high costs and consequently low returns associated with such business." (Orkut et al. 2004:5)
Despite the pressure from the International agencies and Governments of the developed nations it will neither fruitful for the economy of the developing countries nor for the consumers of these countries to implement terms and conditions of lending and borrowing as applied in the developed countries.
Factors contributing to this argument are many and varied, which include:
The difference in economic conditions.
The difference in technology and skills.
Dependence economies of both the countries on Labor-intensive industries.
Loss of competitive advantage in international trade.
The economy of Uganda is considered as one of the fastest-growing economies in African countries. The growth in the Gross Domestic Product of Uganda has reached to 6.9%per years from 2.9% in the era of 1980s according to World Bank. (World Bank 2004:183)
As a consequence of this growth, Appleton (2001:4)has estimated, based on household surveys, that the poverty headcount (defined relative to a poverty line close to the
widely used dollar a day)has declined substantially: From 56%in 1992 to 34%in 1999/2000 - mainly because mean consumption per adult equivalent rose by 4.7%%per
annum over this period (its distribution worsened slightly). Wider measures of poverty (the poverty gap ratio P1 and the poverty severity ratio P2)declined, even more than the poverty headcount ratio (P0), thus indicating that the poorest gained much from this growth (Appleton 2001:27, Table 2). This decline in poverty is confirmed by panel data
that show similar declines in the poverty headcount ratio over the same period (Lawson et al.2003:6). Nevertheless, this is a relatively strict poverty definition, and poverty is
still widespread, particularly in the Northern region, where the panel data also seems to indicate most poverty persistence (Lawson et al.2003:7). Uganda is still a very poor
country, as judged by the fact that it's per capita income of $240 in 2002 is scarcely above half the average level for all African countries ($450)and for all low-income
countries ($430)(World Bank 2004:16). Admittedly, exchange rates exaggerate Uganda ’s poverty, and converting using PPP dollars gives a somewhat better picture.
But even then, at $1360 versus Africa ’s $1 700 and the average for low-income countries of $2 110, Uganda is still amongst the world ’s very poorest countries, despite
its more recent commendable growth performance, and it needs much more growth to reduce poverty (World Bank 2004:16). It is against this context of poverty that the issue of credit in Uganda should be seen. In an impoverished country, albeit one experiencing rapid economic growth, opportunities of individuals and therefore indeed opportunities for macro-economic growth are likely to be constrained by lack of access to resources to invest. It is in this way that micro-finance builds a bridge between micro-economic opportunities for individuals and macro-economic performance of the economy. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Economic Consequences of Credit Market Failure in Uganda Term Paper, n.d.)
Economic Consequences of Credit Market Failure in Uganda Term Paper. Retrieved from https://studentshare.org/macro-microeconomics/1527975-economic-consequences-of-credit-market-failure-in-uganda
(Economic Consequences of Credit Market Failure in Uganda Term Paper)
Economic Consequences of Credit Market Failure in Uganda Term Paper. https://studentshare.org/macro-microeconomics/1527975-economic-consequences-of-credit-market-failure-in-uganda.
“Economic Consequences of Credit Market Failure in Uganda Term Paper”, n.d. https://studentshare.org/macro-microeconomics/1527975-economic-consequences-of-credit-market-failure-in-uganda.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Economic Consequences of Credit Market Failure in Uganda

Consequences of Neoliberalism. Economic Consequences of Neoliberalism

...? Consequences of Neoliberalism Neoliberalism Neoliberalism refers to a market-driven approach to the policy making process for running economy and society (Campbell and Pedersen, 2001, p3). The approach basically stems from the neoclassical theories of economics focusing upon the efficient role of the private enterprises, trade liberalization and establishment of open markets. Neoliberalism supports maximum role of the private sector in determining the dimensions of the political and economic policies and priorities of a country (Klak, 1998, p76). Neoliberalism stresses upon the shift of control from the public to the private sector because it is based upon the belief that the greater involvement of public sector will allow efficient...
14 Pages(3500 words)Essay

Economic Externalities And Market Failure

...Economic Externalities And Market Failure Externalities are defined as a result of an action on a third party or the environment. This result of an action can be both positive and negative. Externalities can be created both out of production and consumption (Boyes 2008, 30). If an externality is being created out of production, then also it can be positive or negative. If we assume, that all goods consumed or produced are private in nature, that is to say that one particular individuals consumption or production of a good does not have an impact on the other, the question of third parties does not exist. However, if and when our actions do have an impact on those individuals who are not directly involved in the process of production...
7 Pages(1750 words)Essay

Market failure

Experts opine that there are multiple reasons that have worked behind the extinction of the cod. The most noteworthy reason that worked to this outcome is that the market could not allocate the resource efficiently and the federal government did not have any comprehensive policy for developing the fishing industry in a sustainable manner. This made the fishing zones vulnerable to over fishing and it led to over exploitation of the resource. This creates a negative externality since the ecological balance is lost due to depletion of the natural resources beyond normal replenishing capability of nature. Once faced with the depleting fish reserve, the Government of Canada took reconstructive steps to allow the population of the exti...
5 Pages(1250 words)Research Paper

Market Failure and Government Failure

...Market failure and government failure 1a) Market failure according to the definition of an economist and government failure from the perspective of a political scientist This can be referred to as an economic term that entails the quantity of product in demand in the market by consumers that are not proportional to quantity being supplied by the suppliers. On the other hand, government failure emanates from two factors, which include active government failure and passive government failure. Active failure results from the states action, which gives worse results than if they had just not responded in any way.Similarly, passive failure is failure of state to intervene in any way in an attempt to correct failure in the market (Coase 23-27...
4 Pages(1000 words)Assignment

Market Failure

...I. II. Thesis: The reasons for market failure due to failure in banking system and steps taken to overcome it. III. Market Failure A. Supervision B.Financial System C. Export Information Collection and Use in Decision-Making Khalifa Al-Qubaisi Dr.Martin H.Saboo Micro Economics 1-5-2009 Market Failure The stock markets are not for the chicken hearted. They can take an individual or an economy on a roller coaster ride from huge profits to deep losses. The year 2008 was marked by volatility in the world stock market due to subprime mortgage crisis. From January to October, 2008, the U.S markets had to face a huge downturn , with a loss of 770 points in a single day. This loss...
6 Pages(1500 words)Case Study

Market Failure Resarch Paper

Market Failure Scarce resources in a free a market are allocated via the price mechanism where the needs or preferences and spending decisions of customers and supply decisions of producers come together to determine acceptable prices. High demand of goods or services leads to increase supply of the products to meet rising demands. High prices motivate producers to produce more while it kills the morale of consumers from purchasing the products. Pricing system sometimes does not consider income inequality in that price of certain goods and services are always high making it hard for low-income earners to access them. It is the duty of the government to intervene and make sure that prices set are not discriminative.
Governmen...
1 Pages(250 words)Research Paper

Market Failure

...Market Failure Contents Market Failure 3 Reasons of market failure 3 Consequences 4 Remedies 4 Reference 5 Market Failure The notion of market failure is incorporated in the economic theory. In the notion the inefficient distribution of services as well as goods by the system of free market are described. In the notion it is implied that one of the participant of the market can end up in better off position without making any other participant worse off. The idea of market failure comes into the picture when an individual is motivated by personal interests which may result in inefficiencies. There is possibility of improvement from the standpoint of the society. The idea is correlated with asymmetries in information, the structures...
2 Pages(500 words)Essay

Uganda

... and consequently create employment for people. The natural sites also enhance the protection of the environment. Traditional/cultural institutions include kingdoms, chiefdoms, clans and the family. Kingdoms existed in Uganda until they were abolished in 1966. However they were reinstated in 1993. Article 246 of the 1995 constitution of Uganda provides for the revitalization, strengthening and support of traditional/cultural institutions. To date government recognizes and supports some of the traditional/cultural institutions (Hutchinson, et. al, 1999). The process of recognition of these institutions is continuous. Communities look up to the traditional/cultural institutions for their identity. Statutory institutions in education include...
8 Pages(2000 words)Essay

The Economic Impact of the Emergence of China and India

The main macroeconomic variable that toys in the global economy’s shift are the emergence of India and China as new superpowers. This emergence certainly has a number of implications, but among the most relevant are: disruption of the equilibrium of the global economy which results in rising demand of goods, giving way to worldwide inflation; the attractiveness of outsourcing to these countries due to low cost but high talent workforce of these countries for cheaper operations.
The growing middle class of China and India results in booming demand for the automobile industry. This increase in demand, with the increasing purchasing power of these countries’ people, is not limited to automobiles but more apparent in...
10 Pages(2500 words)Assignment

Market Structure

The market structure is mainly classified based on the number of active players in that market. These market players are the main component to supply a particular type of product in that market. If we look at the economists' view, these players within an industry are the main parameter for the level of competition in that industry. Whether it is a perfect competition or monopolistic competition these players supply only a small portion of the total output for the industry but this small contribution only determines the main market structure. If we talk about the market types there are few players in the oligopoly markets, only two in duopoly and a single player in the monopoly markets.
If we talk about car manufacturing compa...
10 Pages(2500 words)Coursework

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages(2000 words)Case Study

The Market Failure

... The Market Failure Abstract Market failure is a common economic condition because of ineffective or inefficient production and use of good in the market. Market performance depends on so many parameters like economic conditions, consumer trends, governmental policies etc for its effective functioning. Market failures cause problems to the product manufacturers, service providers, consumers and even for the governments. A healthy market is one which acquires a balance between supply and demand. When an imbalance occurs between supply and demand, the market may consider as going through the failure phase. Market FailureMarket is not an absolute entity. It undergoes relative changes every time because of its association with so many...
8 Pages(2000 words)Term Paper

Bernard Madoff : A Scapegoat of the Economic Crisis

Darwin was condemned and treated with contempt by the Church for proposing the theory of evolution that linked all living matter in the earth, including humans. In the case of Bertrand Russell, he was imprisoned as a conscientious objector, for expressing his opposition to British participation in the First World War. These are typical examples of people being wrongfully punished when they were guilty of no crime or fraud or misdoing. It would be highly improper to associate Bernard Madoff with the aforementioned luminaries, for he was truly guilty of carrying out the biggest financial fraud in modern history. At the same time, it would be simplistic to classify him as a victim of the contemporary judicial system. The truth, in fa...
6 Pages(1500 words)Assignment

Economic Models: The Free Market and The State Owned System

The free market concept is mainly a theoretical concept as every country, even capitalist ones place some restrictions on the ownership and exchange of commodities (Free market economy). Therefore, the term free-market economy primarily means a system where the buyers and sellers are solely responsible for the choices they make. It gives the buyers and sellers the power to do business without being afraid of any regulations and intervention by the state. Hence, a free market gives the absolute power to prices to determine the allocation and distribution of goods and services (Free Market Economy). The pricing mechanism is in turn, driven by the forces of demand and supply of goods and services. Demand and supply of...
9 Pages(2250 words)Case Study

Economic Analysis on BMW Cars in the US Car Industry

Mini and the 1-series rapidly grew at a much higher rate through 2008. Since the early days of the new millennium, BMW has been one of the first automakers to utilize flexible factories in which more than one vehicle model could be produced at the same time. This enabled the company to meet shifts in market demand more effectively than BMW’s competitors could. BMW challenges to retain its market position in the international market for luxury cars. Many automakers, such as Hyundai with its Genesis sedan or Nissan's Infiniti brand are increasingly successful in realizing higher margins earned on luxury vehicles. BMW is rated behind luxury brands such as Lexus, Porsche, Mercedes, and Infiniti for these reasons

1. Th...
7 Pages(1750 words)Case Study

Money Policy versus Credit Market

Financial institutions generally engage in securitization to enhance their profits by trading in the collateralized backed securities that generate high yield returns to the financiers. This nevertheless inversely and negatively affected the credit markets as their efforts to enhance their liquidity positions backfired. Consequently, the import of these monetary strategies has generated cyclical effects on the monetary system to the detriment of the financial system.

Normally, money markets demonstrate a more efficient allocation of credit whenever additional liquidity is injected into the system, which would otherwise display some undesirable distortions. Ultimately, the liquidity market is not easily susceptible to ex...
6 Pages(1500 words)Case Study

Globalization and World Economic Forum at Davos 2010

...Globalization and World Economic Forum at Davos Forces Driving Globalization Globalization has resulted in enhanced interdependencies among thenations of unprecedented scale. This augmented interdependence has caused the dismantling of trade barriers and liberalization of markets. The forces of globalization have impacted the nations, the firms and the individuals alike with the prerequisite of liberalization of trade (Awuah, 2009). The seven forces of globalization are; Markets, Production, Culture, Labor, Technology, Environment and Liberalization. Of these factors, the globalization of markets has engaged substantial attention of the firms and the academia. Some markets are highly globalized, while some are not. The scale of market...
7 Pages(1750 words)Coursework

Foreign Market Entry and Diversification

... some of the recent trends have prompted the prediction that consumption of beer will go down in some of European countries like France, Spain and Germany. The threat of such a consequence has forced many companies to focus on the emerging markets like those of Asian countries where people are likely to spend a large sum of money on the consumption of beer and other alcohol. People in Sweden and UK are found to shift their inclination from to wine. Russia might emerge as the biggest market of beer since consumers there are found to accept beer more readily than vodka. It is quite evident from the graph given below that China is likely to see a sharp rise in beer consumption by the end of 2012. Poland, Romania and Ukraine are also expected...
7 Pages(1750 words)Assignment

The 1846 Invasion into Mexico by the U. S.: The Political and Economic Forces that Brought about the Invasion

Some of the territories led to a war with Mexico from which the United States emerged victorious, expanding its territories and decisively establishing its dominance in North America.

President Andrew Jackson led an example of an administration that set the stage for the way in which James Polk would lead. In 1817, as a still yet military leader, Jackson led the United States into the first of three conflicts with the Seminole Indians from which the acquisition of Florida from Spain would be negotiated and finalized. The situation with Spain was tenuous and should have been dealt with in a diplomatic and cautious manner, but in 1817 President Monroe wrote a letter to General Jackson stating that “Great interests...
8 Pages(2000 words)Article
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Term Paper on topic Economic Consequences of Credit Market Failure in Uganda for FREE!

Contact Us