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Microfinance Case Study

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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. In 1976, Muhammad Yonus introduced a term “Microfinance” and founded a microfinance organization named Greeman bank in Bangladesh. The clients of the Greeman Bank are mostly women and now it
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Although the purpose of the microfinance is, to reduce the poverty but there is no general agreement about the effectiveness of the microfinance. A study by Meier and Rudolf (2010) proposed that microfinance does not play any role in the reduction of poverty and improving the life standards. Sefa K. Awaworyi, (2014) supported that microfinance has no significance impact on the lives of poor. On the contrary, Mahmood et al (2016) proposed that microfinance helps the poor to increase their income level and standard of life. Nadeem Akhtar Khan (2014) argued that microfinance has a positive impact on the household and consumption…show more content…
As Microfinance has the ability to provide the short loans and other microfinance services such as saving, insurance and training etc. to the low income earners which ensure the economic development of any country, this study could push the government to support the Microfinance institutions more properly. in order to make investments in providing financial support to the MFIs, this study would help the government to see the feasibility of their
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