Perhaps micro-financing is most successful in smaller countries with a high rate of poverty because the people are less likely to take advantage of the money being given to them and know they must use it wisely to survive. We would find it interesting to learn more about the men in micro-financing and how they are affected by it, as well as if there are success stories of micro-financing in larger countries. Overall, through our findings, we conclude that micro-financing is a real poverty reducer, has a great impact on social objectives, and it can make a real difference in the life of those who were served.
Generally, without access to capital, people cannot invest in activities such as existing businesses or new microenterprises, and it significantly reduces the chances of many to emerge from poverty. With the existence of microfinance, poor people can access to those small amounts of capital needed to invest in businesses or simply pay for household expenses. Microfinance is able to contribute to poverty alleviation because customers are able to protect, increase, and diversify their income and accumulate assets, which in the end the economic and social structures can be transformed fundamentally. 1.2 History. According to Hans Dieter Siebel, 1983 in Sudan he found the main problem of small entrepreneur which is the lack of access in credit.
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). Since its emergence, microcredit has been viewed as a very important tool for development. Many around the world believe microcredit is the antidote for global poverty.
A cheap credit does not have an influence on the overall quantity of lending by MLIs, but it does lead to a shift in favor of noncommercial loans. For cheap credit, a modern way to monitor is credit scoring which is used for the quantitative measure of the characteristics and performance of past loans to anticipate the future state of loans with similar characteristics (Mark J. Garmaise and Gabriel Natividad 2013). It means that borrowers may find it even easier to borrow money through microfinance several times later. Therefore, MFIs and small business may reach “win-win” situation.
Chapter 1: Introduction 1.1 Background of the Microfinance In many developing countries, people live below the poverty level. They do not have enough money to spend on their household and food. Due to the absent access to the financial services, they are unable to take loans from banks. Because they cannot put acceptable collateral and the cost for lending is too high. Since 1970s, poor have easy access to loans in developing countries due to the microfinance and during past 10 years, this practice becomes very common in many developing countries.
With the jobs that they can get without any education will only provide them basic living. Furthermore, poverty cannot be eradicated in some areas because of poor quality and quantity of foods, clean water and medical assistance. Moreover, with bad environment it can cause the diseases and people could be die because of these diseases since they do not have good quality of medical facilities. In general, poverty is widely spread all over the world but there are areas where due to certain factors, it is more common than in others. There are a lot of factors that can cause poverty one of these examples are, natural disasters.
According to Murphy & Quinlan (2008), poverty refers to a situation where a person’s income or resources are so meager such that they inhibit them from attaining a standard of living that is deemed the least acceptable. Such persons experience disadvantages such as low earnings, unemployment, poor housing and inability to access quality health care and education, etcetera. The United Nation’s Copenhagen Declaration defined pverty as; Lack of income and productive resources to ensure sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments and social discrimination and
This is conceivable notwithstanding when the organizations have a low budgetary limit in the wake of making acquisitions since they put resources into non productive speculation ventures (Carolyn, Carroll and Griffith, 2001). Firms can choose to hold free money streams for theoretical reason as they sit tight for a productive venture that can guarantee better returns in future. The firm can likewise choose to put resources into danger ventures that have higher returns; these speculations may later yield better returns which could be beneficial to the firm. Then again if6 inadequately contributed free
In many countries with high levels of poverty, universal healthcare is a myth and quality healthcare is often a reserve for the financially endowed. Because of this, the poor are forced to contend with below par healthcare services, which are still comparatively expensive. The inability to access regular and balanced meals often results in poor health among individuals in this populace, with chronic illnesses being very common (Hickey & du Toit, 2013). Unfortunately, the same can be said of education. Many children in poverty stricken areas often drop out of school at early ages to seek employment.
There is great optimism as the growth of microfinance has shown that the poor are creditworthy, while the formal banking institutions serve only investment-worthy clients who are non-poor. However, to eliminate poverty, microfinance must be carried out in a sustainable way and cheaply, reaching a massive scale of the poor, with continuous improvement in the quality of service delivery. My study will therefore focus on the impact of microfinance in alleviating poverty in the rural Gambia. 2. THE RESEARCH PROBLEMS There has been a lot of emphasis on the importance of access to financial services by the poor and marginalized as a means of reducing poverty in many forms.