The Importance Of Poverty In Less Developed Countries
1. Introduction
Poverty has been one of the drawbacks in economic development activities. Coleman (1999) argues that the lack of access to capital in less developed countries resulted in severe poverty in those countries. Everything around the people in Less Developed Countries (LDCs) revolves in a cyclical and unpredictable manner, whereby access to little or no capital and the production on a very small-scale basis makes it more unbear-able for the individuals to accumulate savings, acquire relevant assets and plough back their returns into more productive activities.
Poverty in LDCs can be associated with the existence of little or no profit generating ventures, most especially in the rural areas, no or little financial support, overpopula-tion and poor infrastructure which lead to low productivity and persistent poverty in LDCs. Augsburg et al. (2012) argue that problems associated with entrepreneurship and economic growth are credit rationings, which eventually result into a greater level of poverty among the affected people. Tang (1995, pg. 846) argues similarly, that the main economic problem confronting developing countries is “financial intermediation”.
However, access to finance is the best remedy to poverty alleviation as echoed by pol-icy makers all over the world. This fact could be linked to the assumption that access to financial services, improve the chances of consumers’ access to market and econom-ic growth. Meanwhile, for many years, the poor have been
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