Sustainability has both an institutional and a financial dimension. Financially self sustainability, operational sustainability, subsidy dependency index, return on assets, and return on equity are the common indicators of sustainability. There are two levels of self-sustainability against which MFIs are measured. These are financial self sufficiency and operational self sufficiency. 6.4a Financial Self-Sufficiency Financial Self-Sufficiency indicates whether or not enough revenue has been earned to cover both, direct costs - including financing costs, provisions for loan losses, and operating expenses - and indirect costs, including the adjusted cost of capital. Those Microfinance institutions which are having FSS ratio greater than 100% …show more content…
Some empirical works have substantiated the fact that MFIs charging higher interest rates are best performers. Also studies shows that MFIs charging high interest rates have achieved efficiency and became financially sustainable. (see Robinson, 1996; Conning, 1999; and Cull, Kunt and Morduch , …show more content…
If an organization is not financially self sufficient, the SDI can be calculated to find out the rate at which interest rate needs to be increased to cover the same level of costs with the same level of resources( Ledgerwood, 1999) Dunford( 2000) argues that a really good, sustainable social enterprise is not highly dependent on subsidies but also not necessarily subsidy free. 6.4b Operating self sufficiency Operating self-sufficiency is a percentage (%), which indicates whether or not enough revenue has been earned to cover the Microfinance Institution's (MFI's) total costs – operational expenses, loan loss provisions and financial
... middle of paper ... ... 1. What is the difference between a. and a. What are MCI's needs for future external funds likely to be?
Came from a poorer background. Have to fly across the country. Finding somewhere to live.
According to different scholars we can also define social enterprises as the idea of “seeking business solutions to social problems” (Thompson and Doherty 2006a, p. 362) or as the “use of business acumen to address social goals” (Crofts et al. 2003).
... organization's management. The ratios were broken down into classifications of liquidity and asset utilization, debt and interest coverage, profitability and market-based ratios.
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.
Adelman, P. J., & Marks, A. M. (2010). Entrepreneurial Finance. (5 ed.). Bedford, Texas: Prentice Hall.
When discussing the word sustainability, the first topic that comes to mind is the environment. We as humans have “received a particular view of what sustainability means,” believing that it is “essentially about eco-efficiency” (Foundation for International Education). Although the environment is an aspect of being sustainable, the word encompasses much more. Webster’s English Dictionary defines the word as “using a resource so that the resource is not depleted or permanently damaged.” Being sustainable can relate to every aspect of life, whether it be environmental, social, or economical. These three areas contribute to sustainability and the idea of holistic effectiveness. According to the FIE Sustainability Lecture, something is “holistic because it is not just concerned with ecology but also the economy and society, and it is effective rather than efficient because it is not just concerned with doing less harm but with making a positive impact.” In a large metropolitan city such as London, it is easy to analyze these three areas with their relation to sustainability. In every heavily populated city, traffic volume is a big issue; London being
Below is an example of my monthly expenditure budget, which will show my expected expenses per a month. All my fixed costs will remain constant throughout year but the variable costs like petrol will vary between months depending on sales. So based on my budget my business will have to make R42650 every month in order to break even, any money earned above that will be profit. The petrol expense will completely depend on sales but the remainder of the expenses will be very similar every month. Water and electricity is also a variable cost. The mini bar will need more alcohol when stock runs low so the alcohol cost will also change every month. Pre-operating expenses are expenses the business has to make in order to get the business up and running. The business cannot start operating without these expenses being paid. A business like this has many pre-operating expenses, which makes it require a lot of capital. Our residences are equipped with the best of the best security system to prevent crime or thievery. Every one of our vehicles has good condition seat belts available for each passenger; we have a medical aid bag and a fire extinguisher as well as all the required air
The objective of this essay is to illustrate and highlight the role of social entrepreneurship in regards to an actual social enterprise, as well as to make an analysis of the business model applied by the social enterprise. Since the 1990s, the notions of “social enterprise” and “social entrepreneurship” are increasingly gaining more recognition as they indoctrinate new dynamics within the third sectors which include non-profit sectors, voluntary sectors and the social economy, where innovative solutions are created with a social view in mind to respond to problems unresolved by private organizations and public providers (Defourny and Kim, 2011) with a market orientation similar to other conventional enterprises. One social enterprise has
1.Christen, Robert Peck; Rosenberg, Richard & Jayadeva, Veena “Financial institutions with a double-bottom line: implications for the future of microfinance” (July 2004)
This notion of big data, of which the importance increases day by day, has started to present new solutions to the challenges in these fields by helping to develop new methods in many areas. One of these areas is the concept of sustainable economic development that contains the solutions to various issues in the world. Although there are many definitions of the concept of sustainable economic development, the utmost frequently used definition is as follows, "a development model that meets the needs of the present without compromising the ability of future generations to meet their own needs” [Brundtland report]. In other words, it signifies the programming of today's and future's life and development so that it will enable the needs of future generations to be met by keeping a balance between the human being and nature without exploiting the
Accounting aids the government and organisations in decision making for their financial stability. This numerical data helps solve real life problems and contributes to how the economy and businesses perform.
Saving money brings security for any future expenses. The earlier in life an individual begins to save, the better they will be set financially in the years to come. There are several reasons why it is important to save money. A few of these reasons are for emergencies, retirement, and simply for luxury spending. Having money will benefit each of these examples.
Sources of finance are the different methods for a business to earn and obtain money. There are lots of ways to obtain money but two large basic sources of finance, which are the “owner’s capital” and “capital borrowed”. They are also called internal sources of finance and external sources of finance. In those sources, they are mainly divided in two groups, which are short-term sources of finance and long-term sources of finance.
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.