1.0 Introduction. According to Obaidullah Mohammed and Khan Tariqullah in The Islamic Research and Training Institute (IRTI) Saudi Arabia (2008) Microfinance is a powerful poverty alleviation tool. It implies provision of financial services to poor and low-income people. Their low economic standing excludes them from formal financial systems. It allows the poor to participate in services such as, credit, venture capital, savings, and insurance. The provision of financial services to the poor helps
1.1 Introduction to Microfinance 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. Microfinance refers to provision of financial services to poor or low-income clients, including consumers and self-employed.in other words, it refers to a movement that
1.1 Introduction to Microfinance 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. Microfinance refers to provision of financial services to poor or low-income clients, including consumers and self-employed.in other words, it refers to a movement that
Microfinance loans are usually financial services for low income earner and the poor people given by different organizations commonly known as microfinance institutions. Microfinance loans usually gives services to poor and low earning people who don’t have access to other formal institutions of finance. They are often household entrepreneurs and entrepreneurs who are self-employed. The ultimate objective of the microfinance is to ensure that the low income people in the society are given an opportunity
development the idea of microfinance has been created. India has experienced microfinance in both good and bad ways, and I want to use this idea of constructive and undesirable outcomes inside of microfinance in order to show how microfinance can be a saving grace or a mirage to some micro entrepreneurs. I have decided to look at microfinance within India in relations with poverty, development, and women. I want to show the positive, and also some negative, affects that microfinance has had within areas
and developed countries taken several steps to alleviate the poverty. In the world %??(how much %) people are living life below the poverty line their daily or monthly income is less than $ xxx(how much) . One main step is the establishment of Microfinance Institutions which are providing micro credits to the poor people without any collateral. The performance of these institutions is very attractive even some commercial banks also started micro financing on commercial basis. Actually it is not
In the past years microfinance has flourished into an ever growing market for emerging small businesses around the world. Microfinance helps developing countries from all around the world able to obtain the financial help needed to launch small businesses. These people can empower themselves by taking small loans to finance their projects. Micro credit or small amounts of money exist as small loans given to entrepreneurs looking to empower themselves. The Grameen Bank innovation provided to people
A Proposal for Sustainable Development through Microfinance The following proposal synthesizes from the history of the microfinance industry, particularly its successes and failures, a model for developing a sustainable microfinance initiative. Central to this synthesis is the analysis of the strengths and weaknesses, challenges and opportunities, and characteristics of three well-managed microfinance institutions (“MFIs”): Grameen Bank (“Grameen”), Compartamos, and Friendship Bridge (“Friendship”)
Question: “Microfinance appears to offer a ‘win-win’ solution, where both financial institutions and poor clients profit” (Morduch, 1999). Critically assess this statement with reference to the empirical literature. Introduction Microfinance has achieved growing significance as a tool for poverty alleviation with the year 2005 marked as the United Nations International Year of Microcredit. Over the years, the world has witnessed a remarkable growth in the number of institutions offering microfinance
WHAT CHALLENGES DO MICROFINANCE ORGANISATIONS FACE IN THEIR ATTEMPTS TO SERVE THE POOR? ASSESS THE POTENTIAL BENEFITS AND DRAWBACKS OF MICROFINANCE IN IMPROVING LIVING STANDARDS. Over the last 15 years microfinance institutions (MFIs) have rapidly expanded. The number of poor families with a microloan has grown from 7.6 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
(MPPI) The two indices penetration of microfinance (MPI) and Intensity of penetration of microfinance among poor (MPPI) have been presented in the 2009 report for the first time. The calculation of the index has been carried out as follows: • The number of credit of MFIs and members of SHGs with outstanding loans to banks are computed and each state’s share to the country’s total micro finance clients has been worked out. • The intensity of penetration of microfinance (MPI) has been computed by dividing
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
Veena “Financial institutions with a double-bottom line: implications for the future of microfinance” (July 2004) 2.CIA World Factbook 3.Hauss Book 4.Junger, Sebastian “Blood for Oil” Vanity Fair (2007) 5.Kashi, Ed “Curse of the Black Gold” Powerhouse books © 2008 6.Maduagwu, Anthony “Alleviating Poverty in Nigeria” Africa Economic Analysis (2000) 7.“Microfinance” http://en.wikipedia.org/microfinance 8.“Rural poverty in Nigeria” http://www.ruralpovertyportal.org/web/guest/country/home/tags/nigeria
A majority of the Indian population lacks opportunities such as financial resources and thereby the ability to get jobs. They are stuck in an endless cycle which provides them with no opportunities to lift themselves out of poverty. Microcredit has been seen as a lifeline and as an opportunity by governments in developing countries, international funding organizations and donor agencies, in order to help the poor attain money since the 1950’s. It was in the 1950s and1960s, for the first time Indian
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)
To help gain a better understanding of micro-loaning; we will explore the micro-finance history and its organization, poverty and the target subject of this organization, and the benefits and backfires of providing these services. The origin of microfinance can be observed all the way back to the late 19th century. Friedrich Wilhelm Raiffeisen first conceived the idea of cooperative self-help after observing the suffering of farmers in the gr... ... middle of paper ... ...hey can provide the borrowers
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
tremendously. She did get fully funded, and her children quickly went from eating one meal a day, to three. She even plans on taking out another loan soon. This experience was huge for me. Reading The International Bank of Bob made me very interested in microfinance and being able to actually give a microloan was really neat.
The Grameen Project (Grameen Bank) is a microfinance organization and community development bank that took place in Bangladesh, a state in South Asia. The bank made small loans called “the grameen credit” to the poor in Bangladesh without any guarantee that the person that took out the loan will repay the bank. In Bangla language “gram” means village. The banks purpose was to develop a weapon to fight poverty, which was lending money to the poor villagers. The bank would lend money to the poor villagers
Opportunities are always available around us; what really matters is our capability to see such opportunities, the desire to turn them into business ideas and the courage to implement these ideas to the latter. 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