The Dilemma

Propaganda is being seen everywhere today even the best countries in development are into to propaganda to successfully drive their agenda of me myself and I , which speaks to the rampant corruption, nepotism, and the winner take all syndrome. Massive unemployment rate and unfair distribution of wealth to the suffering mass is seen everywhere today. As stated in a report 8 richest people in the world today wealth can even enough to suffice the entire global poverty line rate that is constantly increasing instead of decreasing.

However, to solve this, here are things every government need to do to quench the thirst of the scavengers if I may put it.

1. Encourage massive development in the social economic wellbeing of it citizens that is of accessible to all, without any bias, favour, colour, region, religion or sentiment.

2. Develop credit founding hubs: credit founding hub is of greater important if really government in the twenty first century are to succeed in what they had promised. Many a time because it is so difficult to access finance many talented individuals who are to be job creators are not able to utilized that potential…however, not for any other reason but for  barriers to credit.

Some of these barriers can as follows: high interest rate. Property collateral and many more …

The effect of high interest rate to start-ups !!!

The percentage of an amount of money charged for its use per some period of time. In the financial dialect it can also be said to be the total additional amount that is charge upon request of certain money.

However, several ways are there today in getting funds for startups, but the big question is are the readily available capital favourable in terms of getting them on a high interest rate ??? The answer is big No.

During my undergraduate study I came to realized that seventy percent (70%) of start-ups usually failed before they could reach their first year of operations. According to research that were published on different business websites 3 out of 5 stated that it has to do with the the high interest rate given to start-ups to do there businesses. In some part of the world there are other ways of getting funds instead of going to financial institutions that would charge an unfavorable returned.

Angel networks are perfect funds to go in for when going into business as a startups. In a case were there are no angel networks the ultimate option normally available is to face the banking or micro finance institutions to get funds.

In a scenario where you take certain amount of money at the bank and asked to pay an interest of 35% in 2 years… The one million dollar question is can the startup be able to pay that tremendous amount of interest in two years? No is the answer. For simple fact, a lot of other expenses are to be handle in the hands of the startup.
High interest rate normally served as bottle necks in the face of start-ups in moving forward with their business.

When interest rates rise, banks charge more for business loans. This means you’ll need to use more of your earnings to pay interest on your loans, which decreases profits. You might decide not to start new projects or expansions during periods of high interest rates, which hampers the growth of the company.

Consumer price inflation and its effect on households!!

It is evident of the fact that when there is inflation the effect on households income is always immense. Owing to the fact that consumer price is the level of prices of all goods and services that consumer are willing to pay for at a given time, thus if the Price or prices are low the consumers will have more power to spend and have more benefit of it money. However if the opposite exist, where the prices are at a higher level that will adversely affect the consumers as they will spend more to have less product or services. 

Moreover, this always involves the laws of supply and demand. In the laws of supply it States that producers will love to produce when the prices are higher. In the other hand, demand states that consumer are willing to buy when the prices are at the lowest. With such analysis it senses two signals where we could say the higher the prices the lower the demand, and the lower the prices the higher the demand.
In an economy that is challenge with inflation, the effect can be diversely affecting household income. However, inflation is the continuous increase of prices, which thus affects the value of money. Inflation served as bottlenecks to the economy as it thus restrict people to spend and have value for money.
In a situation where there is inflation in consumer price the effects on households can be better explain as follows:

1.Devaluation of currency: devaluation of currency normally occur as the intentional or deliberate lowering of a currency’s value compared to another country’s currency or a standard value. In the effect of currency devaluation, the consumer normally have burden in spending more money for the purchasing of goods, which thus has an adversary effect on households income.

 

2. Standard of living.
The average cost of a standard set of basic necessities of life, especially of food, shelter and clothing. If the prices of the basic necessities of life are high, it would affect household income has most necessities cannot be met. However, more money will be spend to acquired less products or services. It would affect household income, thus reducing the standing of living.

 

3.Low buying power: low buying power normally occurred when the supply of product is low and the Price of the product is high. It has a negative effect on households income has consumer will buy less product with more money.

 

4.Cost of borrowing will rise: in a case where inflation occur it would affect the cost of borrowing as consumer will have less disposable income to spend.

 

5.Balance of payment: A measure of all flows of money into and out of a country including payments for goods and services and capital flows. The effect on balance of payment is so great as it span all throughout. If the total cost of importan is higher than the export this will have negative effect on households as more local currency can be put together to have an equatable balance of payment in having export goods.
In conclusion, the above are the effects on consumer price inflation on households.

 

Website: Www.webdevelopment21generation.com
Email: Abdulmansaray349@gmail.com