Dine-In was once an outstanding hotel in the heart of Noida and incurred heavy losses. The outdated infrastructure and tough competition by its counterpart shattered the business. The owner, Mr. Vignesh, identified the drawbacks and decided to renovate the hotel. The absence of massive funds delayed the process.
He applied for a Fresh Business Loan and got ₹10,00,000. With this amount, he renovated the hotel with modern amenities and appealing exteriors. It attracted more guests and skyrocketed his hotel’s profits. He thought of the loan as a risk factor. But it transitioned his business completely. Mr. Vignesh secured his once-lost fame and reputation.
Financial inequality has remained a sensitive topic for many years. Inflation still expands the gap between rich and poor. This remains a barrier to budding entrepreneurs and future corporate owners. Business loans by banks can lessen this gap. The Union Budget 2023 predicts that the Indian hospitality market will contribute Rs. 1054 billion to GDP by 2047.
Breaking the Background Study
Many families and individuals across various socio-economic strata are affected by financial inequality. Easy access to money can solve this problem. A well-planned loan encourages people to start business and earn a decent income. This promotes business development and generates employment opportunities for all.
Comprehending Financial Inequality
Financial inequality is an uneven distribution of money, income and wealth. This hampers the economic growth and development of an individual or family. As a result, the standard of living becomes less. This is an important issue that needs to be solved. Indeed, due to lack of financial awareness, many people suffers from this.
Loan: A Path to Equality
Loan is a financial instrument which empowers everyone to access capital. This paves way for opportunities in education,owning assets, or starting a business. This creates equality in all the spheres of our society, irrespective of gender, religion, caste and others. Everyone can broaden our Indian economy if loans are easy to access. People who have a good record of bank statements, can avail a loan. Loans can lessen the financial problems.
Causes of Financial Inequality
Discrimination – Prejudice in employment, education and wealth accelerates inequality.
Education – Inequality in education and training on skills impact children’s learning. This reduces their potential to earn and excel in a field.
Economic Policies – Government should mitigate inequality through taxations and equal wealth distribution.
Technology – Artificial Intelligence and replacement of machines over humans fuel unemployment. This causes lay-offs and income problems.
Unemployment – Many people do not have jobs, despite having a commanding education. This results in less mobilisation of funds in the family.
Alleviating Financial Inequality through Loans
Financial inequality becomes an inevitable problem. It impacts people from lower economic strata. This problem arises due to various causes, but loans can address this disparity. The mobilisation of funds across various people initiates start-ups and small-scale businesses. This generates wealth and jobs to combat unevenness in all aspects.
Loans enable you to have financial empowerment through efficient usage. It initiates you to start ventures, shops, and revamping a business. The easy access to loans breaks the loop of poverty and financial inequality. Loans also help to expand businesses in remote areas of a country.
Predatory loans and high interest rates can lessen loan applications. Banks and governments should make stringent laws and regulations against these practices. Because when banks have fewer loan applications, it can impact the nation’s entire economy. The insights on financial awareness can prevent people from falling into debt traps. Financial counselling on loans can encourage everyone to take loans. Loans are not a trap but a way to improve your financial status.
Final Verdict
Loan is a financial tool which fights against financial inequality. It gives you financial empowerment. It also improves your lifestyle and access to a plethora of basic needs of life. Our country aims for an egalitarian society. It means to bring equal rights to all resources. Loan is one of the methods to bring financial equality. To sum up, easy access to loans achieves the horizon of financial equality.