Microfinances as Part of the Solution for Africa

Finances And Microfinances.

Finances are part of the economy and are the area that “studies the obtaining and administration of money and capital, that is, financial resources” (Roldán, 2017). It not only deals with obtaining resources, but also with saving, spending and investing them. The agents that intervene in these decisions are the State, companies and families.

Finance also plays an important role and is gaining more and more value in the world of international cooperation. León (2021) points out that international financial institutions are providing developing countries with an investment that exceeds 40,000 million dollars and that this represents 5% of capital flows worldwide. These investments support in different areas and promote innovation and entrepreneurship. The author believes that this percentage and this amount named will increase in the coming years. It is for this reason that numerous authors have begun to investigate and analyse what the effect of finances may be in the world of cooperation and to try to predict the next steps to be taken and which powers are going to acquire a more decisive role in this new stage.

A representative part of this cooperation would be Official Development Assistance (ODA), which is defined by the Development Assistance Committee (DAC, 2008) of the OECD as a financial or technical transfer that meets the following requirements:

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  It is granted by official organisms of the donor countries.

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  It is granted to countries and territories included in the list of partner countries or to multilateral organizations.

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  It is concessional. It can be granted as a donation or as a loan, but in the case of a loan, the interest must be lower than in the market and with at least a 25% donation.

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  It must promote development and social, economic and environmental well-being in the countries to which it is intended.