Question

Many nongovernmental organizations (NGOs) finance micro-enterprise loans to developing nations. How do NGOs' small-business investments promote economic development?

Answer 1

NGOs attempt to provide money, services, or goods directly to the people to circumvent government involvement, since many developing nations have corrupt practices. Lending money to men and women who often possess no financial collateral other than livestock allows them to establish small businesses, invest in the local economy, and, hopefully, improve their standard of living.