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Microfinance effect on economic development
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Case: Equity bank of Kenya
• Question 4:
What risks are associated with operating in Zimbabwe?
Equity bank will faces political, economic and financial risks associated with setting up operations and thereafter when operating in Zimbabwe. Whichever strategy Equity Bank selects for expanding into Zimbabwe, either by building operations from scratch for acquiring existing lenders (which should be the preferred method), they face heightened political and economic risks. These risks will hinder them from fulfilling their objectives of expanding the operations and they may not be able to satisfy their shareholder expectations of profit maximizations. There are few other specific challenges and risks are explained below.
Apart from the reduced
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Equity bank planned to bring future employees to work in its branch in Nairobi before working at new branches. This may be a challenge, as many employees may not be willing to come to Nairobi branch to work for long time periods. They may be fine for short periods for training. Equity bank needs to think of an employee friendly strategy in this case. Other banks may have entered into Zimbabwe with a similar business model that Equity bank was planning which will increase competition and could take away potential customers from Equity bank. Inflation fears and government’s budget, laws and regulations, approval from the associated authority to open the microfinance business model amidst political corruption, etc. also stand as challenges in front of them. Before entering they need to find out the appropriate medium-tier bank to …show more content…
They need to force and lobby the concerned influential people in the Zimbabwean legislature to highlight the fact that their vision is to grow as the champion of socio-economic prosperity of the people of Africa and empower clients and other stakeholders and they need governmental support to achieve that. All the discussed risks and challenges will make them to think about acquiring one of the existing lenders in Zimbabwe, which is easier than setting up from scratch. But the Minister of Indigenization is forced to have banks turn over least 51% of ownership to local ownership or to the government. Hence, Equity bank need to look for a bank that satisfies all these rules and still will be able to operate as Equity bank. They should be ready to fully comply with the changing laws in Zimbabwe. The rule on mandating 51% of ownership to local ownership or to the government seems challenging as more control lies with government. As equity bank acquires a bank in Zimbabwe that already follows all the government stipulated rule, then they will avoid the issues related to government mandated ownership rules. As there are significant risks associated with in starting and operating banking business in Zimbabwe they need to use extra caution in selecting the local lender for acquisition. There are many other countries where this local ownweship rules prevails, and banks are
Prior to Fuller’s transfer, management at the Carson’s location was poorly run using the classical approach. While this approach can be successful, management has to find a good middle ground between caring for the company and caring about their employees. A traditional classical approach recognizes that there are five important factors to running a successful business (Miller, 19). According to text, these factors are planning, organizing, command, coordination and control (Miller, 19-20). These factors can be seen when you look at Third Bank as a whole. In the study, the CEO saw the issues in his company and put a plan together to improve. He had meetings with management, like fuller, to organize a solution. He then commanded all locations
Although only required to discuss two associations this writer thought it was important to discuss the SEC as they are directly connected to FINRA in that they take litigation cases, and fraud cases from FINRA and follows up on whether any security laws or criminal laws were broken. Once they investigate the wrong doing they proceed with the corrective action that best suits the offense not excluding criminal prosecution and jail time. According to the Securities and Exchange Commission (2014) website the mission of the SEC is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”. The SEC was created to ensure that all investors big or small have a fair and unbiased account of a companies transactions and current state of affairs.
Zimbabwe had a widespread poverty issue with approximately an 80% unemployment rate in the early 2000 's. (History & Politics, n.d.). Some of the primary industries include mining, steel, wood products, cement, chemicals,and fertilizers. Mining is the primary industry including coal, gold, platinum copper and nickel. The Zimbabwe dollar has devalued international as well as the domestic markets. In 2007, one US dollar was equal to 30,000 Zimbabwean dollars. Zimbabwe 's response to the National Debt was to start printing money; nonetheless, this only lessened the value of existing money and caused prices to rise. An insufficiency of supply intensified the inflation. Following the debt crisis, the US dollar became the main source of currency in September 2007 (Zimbabwe, n.d.). The Zimbabwean government refuses to accept aid from the western nations considering it a threat to the country 's sovereignty. In 2008, the Zimbabwe economy started to improve considerably. From 2009 to 2011 Zimbabwe 's Gross Domestic Economy (GDP) growth averaged 7.3 percent making Zimbabwe is one of the fastest growing economies in South Africa (Zimbabwe, n.d.). The national debt in Zimbabwe increased to over 100% of
I was given the task to make an assignment on the subject of Business Information Management. In this assignment, I have to read and analyse a case study entitled RBS failure caused by inexperienced computer operative in India. After that, I need to make a summary of this case study because it shows what I understand in this case study. Besides that, the objective of this case study is to know the factors that have caused the system failure at Royal Bank of Scotland. The reason I want to know this factor because Royal Bank of Scotland (RBS) has faced computer meltdown with the loss of its share price as well as millions of customers unable to access their account.
Introduction Pramuka Savings and Development Bank (PSDB) was incorporated in 1997 as the first private savings bank in Sri Lanka. Mr. Rohan Perera was the founder of Pramuka Bank and was the founder and chief executive officer of Seylan Bank previously. After resigning from Seylan Bank, Mr. Perera applied for license to incorporate a commercial bank from Central Bank Sri Lanka. But Central Bank only gave license to operate a Savings and Development Bank. But that was also a debatable topic.
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor
In this case study it was stated that there were a problem happen in the outsourcing for the Royal Bank of Scotland. What happen was there were an error that happen during the routine software upgrade that cause million of that bank customer cant access to their account. The error happen when one junior technician in India was accidently wiped all the information during the routine software upgrade. The member of staff that was working under the program for the Royal Bank of Scotland, NatWest and Ulster Bank and it was based in Hyderabad, India.
At the beginning of 2009 the main opposition leader Morgan Tsvangirai agreed to join a government of national unity, but it remains to be seen what tangible impact this will have on an economy that has been in nose-dive for more than a decade. There are still issues that have to be urgently confronted, including the need for real economic and democratic transformation and above all rooting out the corruption and economic mismanagement that have become endemic to the country. For example, economic mismanagement, especially meddling by the Reserve Bank of Zimbabwe fuelled the collapse of the local currency, which had become virtually useless by the end of 2008.
The Special equity relating to wives whom act as guarantors of their husband’s debt was refined by Dixon J who gave the leading judgment in the case of Yerkey v Jones. The essence of the principle was that if a wife who is the surety of her husband’s debt doesn’t understand essential information, due to the fact that the creditor has relied on the husband to inform his wife, and not dealt with her personally, the wife has a prima facie right to have the debt set aside. The principle has faced scrutiny’s about being 'discriminatory' , that it patronizes married women as well as failing to provide equal protection to both sexes. However, in the High Court case of Garcia v National Australia Bank Ltd the principle in Yerkey v Jones was revitalized by expanding the doctrine of unconscionability to include a special disability, suffered by a wife who acted as guarantor upon the circumstances in which the special equity principle applies. To reach their decision, elements of the special equity were applied in Garcia v National Australia Bank Ltd.
02. Banks are vulnerable to stocks which may arise from Non- performing assets, frauds, bad management, even rumors which could cause a run out. In such cases, even if one bank is distressed, the panic spreads like wild fire to the entire system soon/even beyond boundaries.The whole economy of the country collapses and hence ethics in banks is
However, while Zimbabwe’s solution did pull the nation out of its period of hyperinflation, I object and raise an alternative solution that may have been better. It is obvious that the inflation was caused by the central bank’s decision to print more money and by the government policies that allowed it to do so liberally. While hyperinflation is a rare occurrence in economic history, one method of salvation is the creation of an independent central bank. Zimbabwe should have replaced its central bank and enacted more stringent policies towards the printing of money. It is the central bank that prints money. It is the excessive printing of money that causes inflation. The problem clearly lied within the central bank and that is where the solution should have been found as well.
Describe three of the biggest challenges that face entrepreneurs as they are starting the process of developing a venture in Africa. Discuss how you might support them through those challenges.
The Zimbabwe Solution. (2008, April 02). Los Angeles Times. Retrieved 11 November 2011 from http://articles.latimes.com/2008/apr/02/opinion/ed-zimbabwe2
Ecobank expects its employees to be innovative. The employees should always be seeking for new business opportunities and then working towards exploring this opportunities in a profitable manner.
... new economic reforms. This is needed to allow the company to become internationally competitive. By stimulating fair competition and rewarding performing companies are the aim of the economic reforms adopted in Zimbabwe ().