The Microcredit Foundation of India is a non- profit organization, and effective tool for alleviating poverty. The Microcredit Foundation has its base located in southern rural India. Microcredit works with just about everyone who needs their help; however their focus is women. Microcredit presents the women of rural communities with the opportunity to start a business. The services of micro credit are dedicated to creating a better stable economy, opportunities in the establishment of medium sized enterprises, and co-operative development. The Microcredit Foundation of India provides sufficient and affordable customer oriented funding and other financial services as well as consulting and training to the target groups. Microcredit also provides a means of successful social mobilization and empowerment program to lead the credit delivery, even the poorest of the poor stand to benefit from microfinance.
The mission is to have a system in which regular banks could make cheap loans in farming areas that would usually not possible for non-profit. Microcredit has successfully developed 95 rural branches of the bank. These branches successfully renewed and expanded the business of rural areas. It transformed rural banking into a distinct business activity with profit potential (The Swedish Microcredit Foundation). The interaction and the overlapping of financial activity have been increasing quite well in the for-profit organizations, formal financial sector and have been linked to other banks and business. Out of this overlapping and interaction which is now taking place between the for-profit and non-profit organizations is the reason the there are more opportunities in the rural area today then there were before Microcredit was ar...
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...e potential of a person. Grameen believes that all human beings, including the poorest, are endowed with endless potential.
Microcredit has proved time and again that it is access and not interest rates that are a control for the poor. Another discovery followed, that the poor can and will save, and can indeed use a wide range of financial services such as remittances facilities and insurance products. In addition to banks and insurance companies, micro-financing institutions have continued to play an important role in giving credit and saving facilities to micro sectors of the economy. Microfinance is often considered one of the most effective and flexible strategies in the fight against global poverty. It is sustainable and can be implemented on the massive scale necessary to respond to the urgent needs of those living on less than $1 a day, the World’s poorest.
Microcredit, as described by Isserles, is a development “scam” which destroys the lives of Third World peoples. To her, these small loans falsely identify women, and others, as being worthy of credit, but the agreement’s terms subjugate them to continued financial dependency on microcredit loans. The First world hails this program as a success because aid is just a handout while microloans are a way of creating self-reliance through the market. Isserles states that the market becomes the solution to the “temporary” state of poverty, and this idea is due to a disconnect between the First World and the Third World. Projects claim to support women through finance, yet they refuse to alter the labor and domestic conditions of women across the world.
Women all over the world suffer from poverty and unfair treatment. Almost half of these women in poverty come from Africa, being paid barely a dollar a day. These women can barely feed themselves let alone their family. In order to feed and take care of their family they need micro-loans to either start a business and continue their business. Women are not empowered by micro-loans because of gender-based division of labor, their husbands and men in their family, and the women being shamed for not being able to repay the loan and be in debt.
Over 1.4 billion people live on less than $1.25 per day (Singer 7). In impoverished nations, the life expectancy is below fifty, compared to the average of seventy-eight years in rich nations. The mortality rate of children is twenty times greater in “least developed” countries than in developed nations. Nearly 18 million people die every year from avoidable, poverty-related causes (UNICEF). On the other side of the spectrum, there were more than 1,100 billionaires in the world in 2007 (Singer 9). According to Singer, “[t]here are about a billion [people] living at a level of affluence never previously known except in the courts of kings and nobles” (9). Peter Singer insists in his book, The Life You Can Save: Acting Now to End World Poverty, that there is no reason why the rich should not give up part of their income to help the poor achieve a sustainable way of life. Looking at these statistics, who could say that he has an extreme viewpoint? With so many resources and so much money to give away, helping those in need takes no more than a simple action. Giving up some unneeded luxuries to potentially save more than one child’s life would not kill anyone. However, would that, in reality, benefit the impoverished? Ignoring the impoverished will leave them in their current situation; helping them excessively will cause them to rely on others. The real solution to this ongoing crisis lies in microloans.
Banco Compartamos is a commercial microfinance institution rather than a village bank. Up to date, the expansion of the institution has seen it branch out numerously from the pilot objective, which is giving loans to the poor. Analyzing the services delivered by the Grameen Bank in Bangladesh, there is a kind of direct focus on the poor. Notably, loans are not advanced ...
Markets & Customers: Cashpor provides microfinance and other credit services to below the poverty line women in Uttar Pradesh, Bihar and
As found by Hartangi (2007) that success of Micro finance depends upon the practices of that specific bank, which finance poor people, by quoting and example of BRI (Bank Rakyat, Indonesia) researcher says that they provide technical and moral support to the people they lend money, and make sure they do good, they also choose different collaterals like motorcycle, cars, cattle, and land etc to secure their loan yet making collateral stronger incase the client fails to repay and credits interesting for lower class community. Beside this, Risk management, internal audit, financial procedures, transparent system, dedicated staff, and clear incentives to staff and clients are the factors which contribute toward the successful lending of micro finances. Obamuyi (2009) says that poor credit culture and low risk management can result in low rate of return, which finally ends with the failure of the scheme. The risk of low rate of return can also be minimized by the assistance provided by the MFIs to develop the small business of clients (Zelealem, Temtime, & Shunda, 2003).
The lifestyle of people across the world is developing rapidly. As there is a growing concern for people about the lifestyle and way of living, the scope for the microfinance industry is also at a growing pace. A large number of people across the world prefer finance for the purpose of purchase of consumer durables as well as lifestyle products. As the credit card EMI options are more expensive, people prefer NBFCs for the purpose of consumer durable loans. The project done in bajaj finserv explains the role of NBFCs in the consumer durable loans and the procedure undertaken in order to disburse the consumer durable loans.
Poverty is the main problem of everywhere. For the last thee decades several developing and developed countries taken several steps to alleviate the poverty. In the world %??(how much %) people are living life below the poverty line their daily or monthly income is less than $ xxx(how much) . One main step is the establishment of Microfinance Institutions which are providing micro credits to the poor people without any collateral. The performance of these institutions is very attractive even some commercial banks also started micro financing on commercial basis.
Microfinance has been of a great interest in the recent past, particularly in the context of reaching the poorest families in a more effective way. The word microfinance is being used very often in development vocabulary today. Although the word is literally comprised of two words: micro and finance which literally mean small credit; the concept of microfinance goes beyond the provision of small credit to the poor. Christen (1997) defines microfinance as 'the means of providing a variety of financial services to the poor based on market-driven and commercial approaches'(Christen R.P., 1997). This definition encompasses provision of other financial services like savings, money transfers, payments, remittances, and insurance,
Organizations help to build networks among women to create financial self-help groups. They introduce ideas about microfinance, allowing women to participate in
Microfinance evolved from Muhammad Yunus’s poverty alleviation strategy of microcredit – providing small non-collateral short-term loans to the poor. In short, Yunus founded the microfinance institution Grameen Bank after a successful experiment of providing loans to poor women in Bangladesh revealed the poor are capable of repaying debt obligations at a high rate and can benefit from access to credit. The high repayment rate, approximately 98% according to Yunus, meant that a commercial bank could become financially sustainable while providing loans to the poor as a method of poverty alleviation. Furthermore, access to credit provide the poor with the capability to ascent from poverty. Grameen’s rapid success lead to the popularization of microfinance’s ability to alleviate poverty and, consequently, provides valuable insights in effective microfinance business strategies,...
1.Christen, Robert Peck; Rosenberg, Richard & Jayadeva, Veena “Financial institutions with a double-bottom line: implications for the future of microfinance” (July 2004)
Despite a favourable economic environments and well-developed banking sector, microfinance is expanded significantly in Italy. Gradually, banks and public bodies are taking initiatives to start the microfinance services at the national and local level. But the progress in the microfinance sector in Italy is considered still limited even if its current economic situation requires a greater development in this area. The importance of microfinance in a country like Italy can be judged by analysing macroeconomic data: 69 percent population live in the urban area (World Bank, 2014), 28.3 percent of the people are at risk of poverty or social exclusion (Istat, 2014), 94.9 percent are microenterprises (Eurostat, 2012) and the rate of unemployment is 11.9 percent (Istat, 2016).
Microcredit can be defined as small loans, or microloans, for people around the world in extreme poverty to help spur entrepreneurship. The issue of microcredit is extremely important in the world’s economy. Poverty alleviation and economic development are the primary goals of microcredit programs, that is why they began in the developing countries of Asia and Latin America, economist Muhammad Yunus and his Grameen Bank in Bangladesh are credited of pioneering this financial innovation (Smith, Thurman, 2007). After acquiring a loan, impoverished people get involved in self-employment projects that help them to start a business and begin generating income and in many cases leave poverty. Microcredit offers loans to poor people without requesting any financial history from them. These loans help to improve the quality of life of individuals and communities through commitment. In recent years, the idea of giving small loans to poor people became the darling of the development world, giving a way to propel even the poorest people into better lives (Jolis, 2011).
An important term that is cropping up everywhere nowadays is “Microfinance”. It is important for every person interested in the field of finance to be aware of this term, as in the coming days Microfinance is expected to be one of the brightest and the most appealing sector of the Indian Economy.