...Microcredit and its long term benefits Microcredit is the extension of small loans to the poor for them to qualify for traditional bank loans. It has proven an effective and popular measure in the ongoing struggle against poverty, enabling those without access to lending institutions to borrow at bank rates, and start small business. The key implications of microcredit is in its name itself: 'micro'. A number of issues come to mind when 'micro' is considered: The small size of the loans made, small size of savings made, the smaller frequency of loans, shorter repayment periods and amounts, the micro/local level of activities, the community-based immidiacy of microcredit etc. Hence microcredit is not the solution, but is a menu of options and enablements, that has to be put together, based on local conditions and needs. With the current explosion of interest on microcredit issues, several developmental objectives have come to be associated with the it, besides that of only"credit". Of particular importance is savings - as an end in itself, and as a guarantee for loans. Microcredit has been used as an 'inducer' in many other communities. development activities, used as an entry point in a community organizing programme and as an ingredient in larger education/training exercises. An interesting stand is taken by the Virtual Library on Microcredit itself – “it takes microcredit beyond the confines of 'money' and declares in its conceptual...
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...Anti-Poverty Vaccine 15 7. Transformation of Microfinance in India 19 8. Scaling up Microfinance 22 9. Microfinance in India - A Tool For Poverty Reduction 26 10. SWOT Analysis of Microfinance 29 11. Delivery Models of Microfinance 32 12. Interest Rates in MFIs and prevailing trends 36 13. Scope of further study 42 14. Conclusion 44 15. Bibliography 46 OBJECTIVE OF THIS PROJECT WORK This project work tries to outline the prevailing condition of the Microfinance in India in the light of its emergence till now. Microfinance refers to small savings, credit and insurance services extended to socially and economically disadvantaged segments of society. It is emerging as a powerful tool for poverty alleviation in India. The prospect of Micro-Finance is dominated by SHGs (Self Help Groups) - Banks linkage Program. Its main aim is to provide a cost effective mechanism for providing financial services to the poor. To understand the transformation experiences better, the issues that trigger transformation were identified viz.: size, diversity of services, financial sustainability and focus. It is argued that the transformation experiences in India are not large in number. However, I found that there are three forms of organizations that seem to be popular in the microfinance sector – the Non-Banking Finance Companies, the Banks– both Local Area Banks and Urban Co-operative Banks and the...
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...NONGOVERNMENTAL ORGANIZATIONS (NGOs) 11 RURAL SUPPORT PROGRAM (RSP) 11 AGA KHAN RURAL SUPPORT PROGRAM (AKRSP) 11 SARHAD RURAL SUPPORT PROGRAM 12 NATIONAL RURAL SUPPORT PROGRAM (NRSP) 12 ROLE IN POVERTY ALLEVIATION 12 TRANSMISSION MECHANISM OF FINANCE TO POVERTY ALLEVIATION 14 DEVELOPMENT FINANCE SUCCESS STORIES 15 CONCLUSION 16 BIBLIOGRAPHY 17 Figure 1 8 Figure 2 10 Figure 3 10 Figure 4 13 Table 1 7 Table 2 7 Table 3 9 Table 4 10 Table 5 13 INTRODUCTION Development Finance is the offering of financial services to the entrepreneurial poor that contributes finally to the economic growth. Although the most notable of these services is the provision of credit, many other offerings are a part of Development Finance including credit for business activities and credit for emergency and for the fulfillment of life cycle needs. Many Development Financial Institutions (DFIs) give finance for to the persons that contribute to the development of economy. For this purpose these DFIs facilitates poor for savings and deposits and a source of funding which is crucial for DFIs to promote their sustainability, decrease their dependence on donor money, and strengthen their resilience. While Development Finance Institutions were originally conceived to target the entrepreneurs that have...
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...village of Jobra in Bangladesh, as an experiment. He was convinced that: “[…] the poor are like Bonsai trees. When you plant the best seed of the tallest tree in a six-inch deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil-base you provided was inadequate. Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on”. (Yunus, M., 2007) Inspired by this experiment he developed “a good base to grow on” – microfinance, a financial service. Later he would even found the Grameen Bank in order to make this service accessible. A financial service like Microfinance, consisting of micro-credits, -savings and -insurance, offers access to formal banking services, which the poor would not be able to get otherwise. Most of them live under the poverty line with less than $1.25 per day to spend. Particularly poor women are interested in this kind of services. In the past years 80% of all microfinance clients have been women. Simply by giving them the ability to hold an own bank account, to accumulate savings and to grow a business, they provide development and a better lifestyle for their families. U2 lead-singer and humanitarian advocate Bono is sure that when you "give a man a fish, he'll eat for a day. [But when you] Give a woman microcredit, she, her husband, her children and her extended family will eat for a lifetime".(Hewson...
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...STATUS OF MICRO FINANCE IN CLOMBIA (MD. IBRAHIM KHOLILULLAH, DEPT OF AG.FINANCE, BAU MOB: 01718996557) INTRODUCTION Microfinance is the provision of financial services, such as credit, savings, and insurance services, to those who are most likely to be denied access to the traditional banking system. A typical client for a microfinance institution (MFI) is a person too poor to pay usual bank fees for savings accounts or other services or to provide sufficient collateral to back loans. Microfinance aims to bring out the skills of the poor and allow them to propel themselves out of poverty through providing financial services with which they can protect assets and grow microenterprises. MFIs have developed many innovative financial products to offer their clients beyond credit, such as microsavings, money transfer vehicles, and microinsurance. Microfinance is a growing industry throughout the developing world and comprises commercial banks, regulated banks, nongovernmental organizations (NGOs), and nonprofit organizations (NPOs). With approximately 17 million impoverished, there is a large market for the microfinance industry to capture; yet, in Colombia, it is not nearly as well established as in neighboring countries. Peru and Bolivia, for example, are among the world’s most competitive and innovative microfinance markets (The World Factbook). A NOTE ABOUT COLOMBIA Capital and largest city | Bogotá, D.C 4°35′N 74°4′W | Official languages | Spanish | Recognised regional languages...
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...theoretical orientation of microfinance. The diverse sphere of CGAP activities is guided by the philosophy to also champion the cause of commercial microfinance.by way of dissemination of microfinance best practice, grant-making to Micro Other Regional multilateral development banks like Asian Development Bank The Economic and Social Council of the United Nations declared the year 2005 as the International year of Microcredit, a global cell for the financial and building sector to “fuel” the strong entrepreneurial spirit of the...
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... Micro Life Micro Life Table Content Business Description 3 Our Mission Statement 4 Management & Ownership 5 Product of Service 6 Market Overview / Competition / Market Share 7 A. Industry Analysis 7 B. Marketplace Analysis 8 C. Competition 9 Customer Profile 9 Objectives & Strategy 10 A. Product Strategy 10 B. Place/Distribution Strategy 10 C. Price Strategy 11 D. Sales Strategy 11 E. Operations Strategy 11 F. Development Strategy 12 Advertising & Promotion 12 Survey (25 People) 13 Rodgers 5 characteristics 15 Relative Advantages: 17 Compatibility: 18 Complexity: 19 Triability 19 Observability 20 Sources 21 EXECUTIVE SUMMARY Business Description Micro Life is an innovative, convenient all-in-one card for those who use to carry all their cards in their daily life. Because of Micro Life, consumers will not have to carry them around. Micro Life wants their customers to experience the new technology; they will be able to move around without having to worry about losing their IDs or Credit Card. This card can hold up to 10 pieces of information or transaction cards.. We have a contract with Chase, Bank of America, different hospitals and some retailers. By using the card, the consumer is able to pay, travel, get in his car or house as fast as he can say “Micro Life”! Our Mission Statement Designed to make your daily life easy, convenient and secure, Micro Life can be used...
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...Focus on: India International Business Report 2010 – Country focus series The recovery Impact on businesses With the worst of the global recession behind it and Government action which helped to put a floor under the economy, growth in India is slowly accelerating. Downside risks loom as prices rise sharply owing to the fiscal stimulus and supply constrains, and the Reserve Bank has started raising interest rates as inflation remains stubbornly high. The key indicators1 are highlighted below: • the economy expanded by six per cent in the three months to December, down from 7.9 per cent in the previous quarter • industrial production, which expanded by just 2.6 per cent in 2008-2009, posted a 16.7 percentage point increase in January • in the three months to December, exports rose by 2.9 per cent (six per cent year-on-year) whilst imports climbed by 10.8 per cent (1.2 per cent year-on-year) • the rising price of food, fuel and manufactured goods saw the wholesale price index-based inflation soar to a 16-month high of 9.89 per cent in February. The Grant Thornton International Business Report (IBR) 2010 surveyed the views of over 7,400 privately held businesses (PHBs) in 36 economies around the world. This report focuses on India, the experiences and attitudes of its privately held businesses and how they have been affected by the economic crisis along with how they are dealing with the recovery, as illustrated in figure 1. The IBR survey tells us that businesses in India...
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...poor people for self employment projects that generate income in allowing them to take care of themselves and their families” (Microcredit Summit, 1997). The World Bank has recognized microfinance programme as an approach to address income inequalities and poverty. The microfinance scheme has been proven to be successful in many countries in addressing the problems of poverty. The World Bank has also declared 2005 as the year of microfinance with the aim to expand their poverty eradication campaign. The main aim of the paper is to assess the potentials of Islamic financing schemes for micro financing purposes. The paper argues that Islamic finance has an important role for furthering socio-economic development of the poor and small (micro) entrepreneurs without charging interest (read: riba’). Furthermore, Islamic financing schemes have moral and ethical attributes that can effectively motivate micro entrepreneurs to thrive. The paper also argues that there is a nexus between Islamic banking and microfinance as many elements of microfinance could be considered consistent with the broader goals of Islamic banking. The paper, first, introduces the concepts of microfinance, and presents a case for Islamic microfinance to become one of the components of Islamic banking. The paper then discusses, the potentials of various Islamic financing schemes that can be advanced and adapted from microfinance purposes including techniques to mitigate the inherent risks. Finally, the paper concludes...
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...MICROFINANCE INSTITUTIONS AND ECONOMIC GROWTH OF SMALL & MICRO-ENTERPRISES (SMES) ACASE STUDY OF (UWMFO) MICRO FINANCE INSTITUTION BY HENRY EGYEYU DEDICATION To the memory of my grand father Daniel Egeyu Whose love & enthusiasm for academia first kindled mine? ABSTRACT This research study investigates the impact of microfinance institutions on entrepreneurial development of Small & Micro-enterprises (SMEs) that are craving for growth and development in a war revived district called Gulu. The researcher used questionnaire as an instrument of primary data collection. Tables and simple percentages were used in data presentation. For clear analysis, the study centers on two broad variables; the dependent variable which is entrepreneurial development and the independent variable which is microfinance institutions. Three different hypotheses were formulated and tested using various statistical tools such as chi-square test, analysis of variance and simple regression analysis. The study reveals that (i) there is a significant difference in the number of entrepreneurs who used microfinance institutions and those who do not use them; (ii) there is a significant effect of microfinance institutions activities in predicting entrepreneurial productivity; and (iii) that there is no significant effect of microfinance institutions activities in predicting entrepreneurial development. The researcher concludes...
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...Background Financial institutions are great motivator in ensuring money navigation to the needy from the person who have plethora of that, especially for the countries of the third world alike the developed nations (Harker & Zenios, 2008). In developing economy and overall money system their contributions are of no denying. Financial institutions in the Asia pacific region are doing exactly the same. Financial institutions like large retail banks (e.g. Barclays, Citi NA), segmented financial institutions like micro finance institutions are providing financial services to the people of that region. Apart from this there are several insurance companies who are operating their business in that region, ensuring the minimal risks of the business organizations of this region (Kumbhakar, Lozano-Vivas, Lovell, & Hasan, 1999). On the other hand a large of money is being flown through these organizations as remittance to the people and to the nations as well. This adding to the economic condition of those nations and the living of the people as well. Moreover, these type of financial institutions are providing world class banking services to the people of that region. Influenced by the success of these financial institutions several other local institutions are furnishing themselves for providing better services to the clients and getting market share from their counterparts (Kumbhakar, Lozano-Vivas, Lovell, & Hasan, 1999). It is worth denying to say that the standards that...
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...A PROJECT REPORT ON STRATEGIC MANAGEMENT. SUBMITTED TO : NIILM-CMS SUBMITTED BY: SIDDHARTH ATMARAMANI PGDM (2010-2012) ROLL NO. 2010169 UNDER THE GUIDIANCE OF: MS.RITU SRIVASTAVA ANSWER 3 : OPERATIONAL EFFICIENCY OR STRATEGY For a company to be successful it is required for it to be flexible enough to adapt to the changing economic conditions. They must outbeat their own benchmarks continuously to achieve best practices. For example regarding axis bank : Profit after tax up 34.76% to `3,388.49 crores Net interest income up 31.14% to `6,562.99 crores Fee & other income up 32.39% to `4,135.16 crores Deposits up 33.93% to `189,237.80 crores Demand deposits up 17.78% to `77,767.40 crores Advances up 36.48% to `142,407.83 crores Retail assets up 33.32% to `27,759.23 crores Network of branches and extension counters increased from 983 to 1,390 Total number of atms went up from 4,293 to 6,270 Net npa ratio as a percentage of net customer assets down to 0.26% from 0.36% Earnings per share (basic) increased from `65.78 to `82.95 Proposed dividend up from 120% to 140% Capital adequacy ratio stood at 12.65% as against the minimum regulatory norm of 9% And also they must nurture a few core competencies to stay ahead of rivals. Eg. Rivals can quickly copy any market position and competitive advantage is at best temporary. For example, in the banking industry if any bank comes up with a new product or scheme or merges up with other or introduces cost cutting approaches...
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...INTRODUCTION Following this introduction on Nigeria’s economic development challenge, this paper reviews business economics, outlining the relationship with innovation and social entrepreneurship. It also presents a holistic framework for economic development covering the individual, firm and macro levels, and outlines the roles of stakeholders at each level, in fostering national development. It concludes by calling on all stakeholders to play their part in leveraging entrepreneurship and all aspects of business economics to unleash the wealth of human capital that Nigeria is endowed with so that more people can participate in the transformation of Nigeria. Nigeria as the most populous country in Africa is naturally endowed with millions and millions of acres of arable land, 38.5 billion barrels of stated oil reserves, vast gas reserves, a variety of unexploited minerals, and a wealth of human capital by virtue of its estimated population of 150 million. It is the world’s eighth largest exporter of oil, and Africa’s second largest economy, after South Africa. Nigeria accounts for 15 per cent of Africa’s population, contributes 11 per cent of Africa’s total output and 16 per cent of its foreign reserves while it accounts for half of the population and more than two-thirds of the output of the West Africa sub-region. It has been at the forefront of the resolution of many political challenges in Africa. Over the last decade, Nigeria has implemented far reaching economic reforms...
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...Companies can Make Fortune at the Bottom of the Pyramid Rajesh N. Kumar James Cook University Table of Contents Executive Summary 3 Background 4 Introduction 4 What is the BoP Strategy 6 What is the Driver for MNCs to Focus on BoP Market 9 Is There a Buying Potential at the BoP 9 Behavior of Consumers in Asian Market 10 Sector With Highest Potential of Business in BoP Market 11 Recommendation 12 How to Approach the BoP Community - Innovation 14 Implement Innovative Approach to tap BoP Market 15 References 16 Appendix A 17 Appendix B 18 Executive Summary This report explores published journals, blogs and books around The Bottom of the Pyramid (BoP) being the breakthrough in the Strategy for businesses across segment and analyse what steps would lead to success through the journey of business around the 4 billion population existing in the bottom of the pyramid layer. Methods of analysis include statistical and market trend, and ratios of performance. Main area of focus is Asian market through the report as they account to 3/4th of the population residing in the bottom of the Pyramid, given the uniqueness of this region around culture, market behavior, people mentality and social dynamics. Gaining that knowledge would become important to have a break through into this market and ensure it’s a sustainable business...
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...World Bank to be among the poorest countries in the world (world development report 1992). Kenya’s development challenge therefore remains in finding sustainable poverty eradication strategies. Micro and small enterprises have been seen as one of the strategies that can bring faster development. MFI does therefore play a big role in financing the micro and small enterprises for faster development. MFI’s enterprises are also highly rated for employment creation. They are therefore important in Kenya where unemployment and underemployment are estimated at between 25% and 35% respectively. MFI s’ through the provision of credit influence the type of technology adopted by entrepreneurs and even the rate of technology adoption. Small scale enterprises in the agricultural sector play a big role in providing food, income generation and employment creation. The application of technology is vital in enhancing growth and development of these enterprises. Inflation is vital in the growth and development of any MFI. Both large scale and small scale MFI depend on financial organizations for credit in order to raise capital and also finance any development projects. The large scale organizations have found it much easier to access credit from commercial banks and other financial institutions. The micro and small scale enterprises have not been able to...
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