The impact of microcredit programmes on reducing poverty and enhancing social well-being of the poor has been widely investigated. Reviewing the literature investigating the microfinance impact on poverty alleviation shows disparities between supporters and opponents. In summary one can identify three main positions in the microfinance literature: those that argue for the positive impact of microcredit on the poor; those that argue for the negative impact of microcredit on the poor; and the third
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
S (2005) Micro finance is a form of financial development that has primarily focused on alleviating poverty and improving the living standard by providing financial services to the poor. Haroon and Jamal (2008) Most people think of micro finance as Micro Credit i.e. lending small amounts of money to the poor. Micro finance is not only Micro Credit, but it also has a broader perspective which includes insurance, transactional services and savings. When a person earn less than two dollar per day
study and organization of the study. 1.1 Background of the Study The global poverty crises and resulting human suffering, environmental degradation and many other societal ills are hastening for the search of scalable anti-poverty approaches. These deplorable conditions are the reasons behind the increasing interest in microcredit and more broadly, microfinance. As a matter of fact, gatherings such as the Microcredit Summit, global support through the United ... ... middle of paper ... ..
permanent access to an appropriate range of high quality financial services, it includes not just credit but also savings, insurance, and fund transfers.”. Promoter’s microfinance generally believes that such access will help poor people out of poverty. Microcredit should not be mixed with microfinance, which addresses a full range of banking needs for the poor people. As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term "microfinance"
Role of Microfinance:- The micro credit of microfinance program was first initiated in the year 1976 in Bangladesh with promise of providing credit to the poor without collateral , alleviating poverty and unleashing human creativity and endeavor of the poor people. Microfinance impact studies have demonstrated that : • Microfinance helps poor households meet basic needs and protects them against risks. • The use of financial services by low-income households leads to improvements in household economic
Microfinance is used as a tool to alleviate poverty and help poor and empowerment of female members of the society. There are several microfinance institutions (MFI‘s), microfinance banks (MFB’s), NGO‘s, and many other welfare trusts that are active for alleviation of poverty. Other institutions such as State Bank of Pakistan (SBP), Pakistan Microfinance Network (PMN), and Pakistan Poverty Alleviation Fund (PPAF) are also active in this field and making their efforts for development of our economy
million in 1997 to 137.5 million in 2010. Microcredit has generated significant confidence for fast poverty alleviation; creating a multiplier effect leading to the eradication of poverty and hunger, universal primary education, the promotion of gender equality and empowerment of women in developing nations. It can be argued that microcredit is a “win-win” opportunity, in which the poor are given the financial capital and means to pull themselves out of poverty trap (Duflo, E et al, 2013). However this
No matter in either developing or developed country, microfinance can be significantly considered as one of the most actual techniques on the alleviation of poverty. Even though essentially limited by the possibility of default, the loss given default, and current value of expected recoveries, as Nicolas Krauss said (2008), microfinance institutions (MFIs) have tried to minimize the risk of financial loss by microfinance transformation from volunteer-driven non-official organization to market-pushed
1 INTRODUCTION 1.1 Background information Poverty is a universal phenomenon, that is found virtually everywhere and affect a large number of people in the globe. To this effect Thirlwall (2003:87) contributing to the poverty literature, says that ‘in poverty, there is feeling of powerlessness, vulnerability and fear because the poor is not free, he is exposed to greater risks and living on the margin of subsistence.’ That is to say, the poor have little or no significant say in the society; they