Problem
High interest rates
Other Names:
Exorbitant interest ratesStructural usury
Prohibitive cost of money
Exorbitant debt interest
Deepening debt cycle
Nature:
Relatively high interest rates slows borrowing, stagnates business and creates hardships on individual borrowers. Economic policies in the industrial countries determine interest rates worldwide.
Incidence:
High real interest rates are adding significantly to structural budget deficits in both developed and developing countries.
Counter Claim:
The organized money-market, even if developed in agricultural regions, would tend to find that loans by verbal agreement, without security, and dependent on ability to repay based on income constantly subject to climatic hazards and price fluctuations, involve an unacceptably high risk. The unorganized money-market has the advantage of making cash readily available under conditions which official institutions would not accept.
Broader Problems:
MoneyUsuryPayment of interestInstability of the world economy Aggravates:
Bad loansMonopoliesExcessive costsHousing shortageInadequate savingsBusiness bankruptcyAbandoned private homesLack of capital developmentIncomplete cost projectionsDecline in public sector savingsProhibitive costs for businessesUnnecessary personal consumptionProhibitive cost of cooperative start-upSubsistence approach to capital resourcesDiminishing capital investment in small communitiesIrregular payments of international financial obligations Strategies:
Charging interestReducing cost of moneyProviding moneyMaking cheaper moneyIncreasing interest rates Values:
High-mindednessHigh-spiritednessInterestSelf-interestCostlinessDebtExorbitanceProhibitionSelfishness References:
Mark, Jeffrey: An Analysis of UsuryNelson, Benjamin: The Idea of Usury: from tribal brotherhood to universal otherhood Problem Type:
F: Fuzzy exceptional problems Subject(s):
Society → CommunitiesCommerce → Finance
Commerce → Money
Commerce → Credit
Commerce → Purchasing, supplying
Industry → Construction
Related UN Sustainable Development Goals:
Date of last update
06.11.2017 – 19:38 CET