Saving gaps and Population growth

What was Bangladesh’s amount saved per member with a bank

Every member with a bank savings<$5

2 main reasons for saving gaps

1. low income

2. Low access to bank

   sum of reason, low savings, banks had small amount of money, saving gap

What is saving gap

Gap between a banks savings and the money firms want go borrow from the bank

What is the Harrod-Domar Model

Low saving gaps , low investment, , decrease AD, decrease real GDP , LRAS shifts left , decrease Real GD, lower income, low savings, increase savings gaps

Affect if low savings gaps through firms

Lower profits , decrease corporation taxes and decrease money to invest in development

What strategy to use for saving gaps

Microfinance

What is microfinance

Small loans given to small firms who otherwise would have no access to financial services

How does microfinace help saving gaps

Increase productivity, decrease costs , decrease prices , increase competitiveness , increase income, increase savings, increase money in bank, decrease savings gaps , increase investment, LRAS right , AD right , economic growth and increase profits , increase corporation tax revenue

How much micro finance in the world

$102bn microfinance all over the world

Evaluation for microfinance strategy

Microfinance lenders have very high interest rates

No extra income , no savings

Unable to pay interest rates , bankruptcy, unemployment, increase savings gaps

Population of Tanzania

Population doubled over 20 years

Constrains of population growth

1. More people stay at home and cannot develop careers, productivity decreases now

2. Schools and hospitals, over-run , quality of education and healthcare decreases , productivity decreases in future

Strategy for population growth

1. Improve access to education for girls and standard pf education e.g Imaculate heaart sisters of Africa

   increase human capital , increase income. Women more career focused , decrease birth rates

   e.g2010 , Womwn with better education had less than half the children than those with no education

2. Sex education e.g Tawla , sexual and reproductive health clubs

   decrease birth rates , decrease population growth, increase to focus on studies m productivity increases

Evaluation for strategy

Relegiom

Catholic church - Contraception is a sin, Tanzania Christan church