Figure 2 comes from Kiva, the San Francisco-based microfinance institution, and is not a common image when analyzing the vast amount of material on and the practice of microcredit and microfinance, which almost exclusively focuses on women. As of May 2008, microcredit’s most popular form, the Grameen Bank has 1.5 million borrowers, 97% of which are female (Ahmed 2008:128). Harper suggests that the case for women relies on the fact that women tend to have less access to anything, and find it hard to resist the pressures of repayment are more likely to accept routine standardized conditions of borrowing and repayment, and are considered more predictable in terms of customer behaviour (Harper 2011:55). Perhaps this illustrates a far too simplistic view on gender patterns of microfinance, but it does not speak to the barriers that men have in attempting to gain access to MFIs, which are geared predominately towards women. The borrower is a Yemeni man in his late 20s that is asking for a loan to purchase construction materials to renovate his family home. The loan activity itself is arguably not an economic venture, but it is important nonetheless. Kiva attempts to do micro-lending a little bit differently, by allowing borrowers access to capital for a multitude of reasons and then categorizing the activities based on subject matter such as Adnan, Figure 2’s subject. Kiva also strongly emphasizes ‘the human connection factor,’ being able to see and get to know borrowers through personable profiles. Nonetheless, Kiva appears to generally operate as any other MFIs, with extensive coverage on the location and conditions of the borrower and rate of return. Now, because Adnan’s loan activity is not inherently economic, questions on repaymen...
... middle of paper ...
...Hope: essays on the reality of science studies. Cambridge, Mass: Harvard University Press.
Rist, Gilbert. 2002. “Some Thoughts on What is to be Done.” Pp. 238-248 in The History of Development: from Western Origins to Global Faith. London, England: Zed Books.
Rostow, W.W. 1960. “The Five Stages of Growth.” Pp. 4-16 in The Stages of Economic Growth, a Non-Communist Manifesto. Cambridge, Mass: Cambridge University Press.
Seibel, Hans Dieter and Fabrizio Felloni. 2005. “Mainstreaming Banking with the Poor in the Philippines.” Internationales Asienform 36(3/4): 361-375.
Taylor, Marcus. 2011. “Freedom from Poverty is Not Free: rural development and the microfinance crisis in Andhra Pradesh, India.” Journal of Agrarian Change 11(4): 484-504.
United Nations Microfinance and Capital Development. 2014. “Who We Are.” “What We Do” Retrieved April 7, 2014 (http://www.uncdf.org
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 ...
Women in developing countries are not empowered by micro-loans because it can exert women further into debt. Not all women are smart and educated enough to be able to profit from these micro-loans and instead they can be quite dumb and irresponsible with the exerting them further into debt. This does not apply to all the women who receive micro-loans, but a decent portion of them it does. Although, micro-loans could be the key success to a family's triumph out of poverty, they can still propel people into a rough and tough situation. Also, if a women’s micro-loan does not work out they will be put to shame by their whole entire community.
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).
Rostow, Walt W. 1960. The stages of Economic Growth: A Non-Communist Manifesto. Cambridge: Cambridge University Press.
The intensity of penetration of microfinance (MPI) has been computed by dividing the share of the state in microfinance clients by share of population. Intensity of penetration of microfinance among poor (MPPI) has been derived by dividing the share of the state in microfinance clients by share of population. Since the microfinance clients are in the numerator, a value of more than 1 indicates that clients acquired are more than proportional to the population. Higher the score, i.e. more than 1, the better is the performance. Lower the score from 1 which is the par value, poorer is the performance on the state
There are some informal financial alternate like moneylenders, family loans and traders are usually restricted to a limited amount, mostly inflexible. It is necessary to help the poor and provide them sustainable economic opportunities at gross root level.
1.Christen, Robert Peck; Rosenberg, Richard & Jayadeva, Veena “Financial institutions with a double-bottom line: implications for the future of microfinance” (July 2004)
Bangladesh has recently gained its independence from Pakistan in a civil war. In the country’s first thirty years, it could barely support itself and its people. In those times, most people in Bangladesh lived on less than a dollar a day. The country, it seems, was born into poverty. In the documentary “Pennies a Day” Yunus said, “Poverty is a darkness around you, there is no hope to be seen.” (qtd, Pennies) Since Bangladesh is a predominately Muslim country, Grameen Bank’s micro loans are given to mostly women, about ninety-six percent (Pennies). Women in Bangladesh are underrepresented and are usually not seen in the market place. Grameen is ch...
Since the poor people do not have steady jobs, their incomes are irregular and unpredictable, and banks have no collateral against which the loans can be given out; thus the banks do not want poor clients from both rural and urban areas. Furthermore, the “geographical distance, the widespread illiteracy, and the diverse backgrounds of borrowers” (in this case the rural poor) and the frequency of high cost transactions make it difficult and non-desirable for the banks to give out the loans to rural poor communities. Banks also believe in the fact that the government’s rules and regulations make it difficult to distribute loans to the poor. India’s rural poor have their own financial needs that are influenced by their location, living situation, and their availability to resources and opportunities.
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. Although the Grameen Bank focuses only on people from Bangladesh, different microfinance institutions had been established around the world. Accion International is one example of these institutions in Latin America, which started providing loans in 1973 (The history of microfinance, 2005). These financial institutions started to grow rapidly due to high demands of small loans. Poor people around the world started to lose faith to their countries’ authorities to provide for their well being and started to tur...
Most poor people manage to mobilize resources to develop their enterprises and their dwellings slowly over time. Financial services could enable the poor to leverage their initiative, accelerating the process of building incomes, assets and economic security. However, conventional financial institutions seldom lend down-market to serve the needs of low-income families and women-headed households. They are very often denied access to credit for any purpose, making the discussion of the level of interest rate and other terms of finance irrelevant. Therefore, the fundamental problem is not so much of unaffordable terms of loan but rather of the lack of access to credit itself.
The first and arguably most common effect of poverty on society is its financial impact (Veritta, 2008). In many of the societies that experienced significantly high levels of poverty, debt was increasingly common, and especially debt accrued from moneylenders (Hatcher, 2016). For many individuals living in poverty, access to financial services such as banking is often stifled and rudimentary, making it difficult for such individuals to access self-improvement loans at standard and fair rates (Yoshikawa, Aber, & Beardslee, 2012). For these individuals, moneylenders are the best option available, which results in them paying exorbitant interest rates. The interconnection between poverty and finance, however, is cyclic in nature. The lack of finances or access to financial services causes poverty, which in turn causes an isolation of individuals from finances and financial services (Hickey & du Toit, 2013). This makes poverty a fairly complex problem to