In the later part of 20th century, personal financing has seen a tremendous growth. Personal financing grew with everyday, making the world economy more and more leveraged.
What is Personal Finance?
Personal financing has indeed been a blessing in many ways for the world economy, personal financing provided people with purchasing power hence boosting the consumption world wide, with this exponential growth in buying power, world wide, businesses prospered, demand grew as a result, the overall economic conditions improved, more businesses, more jobs, G.D.P Growth, improved standards of living and more money circulation leading to more credit in the form of personal financing. This chain leads to the rapid growth of the world economy in the past few decades.
On the contrary, personal financing is responsible for the recession world wide, with the ever growing personal financing, banks and institutions became greedy, these institutions, in order to make the product more readily available to the masses, went to the extent of providing credit to without any due diligence at all. People on the other hand, started spending more than their means, not thinking about how to return the credit, why even waste your time thinking about returning the credit? When you have so many other institutions, practically begging you to take credit from them, cheap and easy. As a result of this people borrowed from one and repaid the other and a vicious cycle began. With these kinds of activities at their peek, the world was set for a disaster; all that was required was a little spark, which came in the form of mortgage market crash in late 2007, what happened next is known to every one.
To conclude my discussion, Personal financing, itself is not a demon. It is the use or abuse of the product that creates problem, had this credit been used in the right direction (productive activities) instead of paying for plastic surgeries, it would have been a totally different ball game, but it's never too late. It's the collective responsibility of the society (users and providers) to avoid abuse of this facility. We should take this recession as an opportunity to reconcile our selves, be more responsible and work for a better future.