...NGO Promoted Microcredit Programs and Women's Empowerment in Rural Bangladesh Introduction: Nongovernmental organizations (NGOs) in rural Bangladesh are reaching out to poor women with collateral-free credit programs aimed at both alleviating poverty and increasing women's status. The present study investigated the hypothesis that participation in credit-related activities by NGO credit members leads to greater empowerment of credit members compared to nonmembers. Objectives: To measure the status of empowerment of rural women (both members and non members of the micro-credit organization) in the selected areas To ascertain the factors related to empowerment of women and To assess the role of the micro-credit organizations in empowering rural women in Bangladesh The main objective in this paper was to determine the important factors that contribute to women’s economic success in microcredit programs Women Empowerment: Empowerment refers to increasing the spiritual, political, social or economic strength of individuals and communities. It often involves the empowered developing confidence in their own capacities. empowerment of women, also called gender empowerment, has become a significant topic of discussion in regards to development and economics. Entire nations, businesses, communities, and groups can benefit from the implementation of programs and policies that adopt the notion of women empowerment.[1] Empowerment is one of the main procedural concerns when addressing...
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...Examining the Success of Microcredit in Bangladesh Microcredit, which provides small loans to those in poverty, has rapidly increased in third world countries, such as Bangladesh, over recent decades. Muhammad Yunus, who started a lending organization called the Grameen Bank, developed this program in the 1970s. There has been a great amount of success in reaching millions of borrowers, most of whom are women. The loans are often provided to pay for start-up costs of small businesses, and using the money to make money is strongly encouraged. Along with the tremendous success that has been experienced, there have been numerous improvements among the countries that have adopted such microcredit programs, especially Bangladesh. For example, while poverty is being alleviated, women are also experiencing empowerment. Not only have the lives of women, their families, and communities as a whole improved, but also, such lending programs significantly contribute to society, politics, and the economy. However, it is questioned whether or not microcredit programs have effectively reached the poorest of the poor. This argument is supported by the fact that the extremely poor population is vulnerable, and is being excluded from the vast majority that is able to take advantage of such programs. Nevertheless, the well-being of the poor in general has been greatly influenced by the many positive contributions of these small loans. In the article, “Micro-credit and Poverty Reduction...
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...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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...A SIMPLE REPRESENTATION OF THE ACTIVITIES OF MICRO FINANCE INSTITUTIONS Annesha Zeheen Introduction This paper attempts to graphically present a simplified version of the activities of a microfinance institution (MFI) with a view to facilitating our understanding of its activities and role in economic development, creating an enabling environment for MFIs to work, promoting and fostering sustainable development of microfinance institutions and comprehending the need and ways to regulate them. The main function of a microfinance institution is to provide sustainable financial services mainly to the small borrowers and clients. Intially 5 to 6 like-minded persons mostly women organize a Group, several groups make a Center. Usually memebrs have to attend the weekly meetings and deposit weekly savings. The loans are mostly provided against little or no collateral, but repayment rate is generally commendable because of the peer pressure originated from members of groups. MFIs’ services are not limited to credit, but include savings, insurance, money transfers and others. The credit-deposit methods include group-lending and -liability, short repayment period with frequent installments, pre-loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly[1]. (Microfinance Gateway 2009). Borrowers take micro-loans for starting or expanding small busenesses, fro the profit of...
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...Term paper On Microcredit ECO -242 Principles of Macroeconomics Prepared for Janifar Alam Lecturer School of business Prepared By Group 1 Sec: B Semester: Summer-2013 31th July 2013 To Janifar Alam Lecturer School of business University of Information Technology and Science (UITS) Subject: Submitted the Term paper of ECO-242 Dear Madam It is indeed a great pleasure for us to be able to hand over the result of our hardship of the group Term paper on Microcredit.This report is the result of the knowledge. This has been acquired from the respective course. We tried our level best for preparing this report. The information of this report is mainly based on our knowledge and Internet information. We fervently hope that you will find this plan worth reading. Please feel free for any query or clarification that you would like us explain. Hope you will appreciate our hard work and excuse the minor errors. Thanking you for your cooperation. Sincerely Group 1 Name&ID Signetures Rahat a jan 12310577 Jinia Afrin 12410291 Abdia Sultana 12310290 Jahidul Islam 12310377 Obaidur Rahman 123210572 Acknowledgement First of all we want to give thanks to almighty Allah for giving us the opportunity to complete...
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...Poverty is unnecessary * Muhammad Yunus A big idea sometimes starts out small. In 1974, after earning his Ph.D. in the U.S., Muhammad Yunus was teaching economics at Bangladesh's Chittagong University. As the founder of Grameen Bank and the pioneer of microcredit, Muhammad Yunus has transformed the third world with his visionary leadership. Microcredit is the innovative banking program that provides poor individuals with small loans so that they in turn can become agents of change by launching their own businesses and beginning to address the issue of poverty within their communities. Mohammed Yunus as a visionary: Muhummad Yunus believes that poverty can totally be conquered in his lifetime is the right approach is adopted. This viewpoint is based on his belief that the inherent ability of the poor can be unleashed once they are given the opportunity to help themselves (muhammadyunus.org). His dream of addressing poverty through an economic development lens became a reality with the establishment of Gramee Bank in Bangladesh, which recognized that credit without collateral is a fundamental right of the poor. Grameen Bank was a grand success and has been widely replicated all over the world. Yunus was awarded the Nobel Peace Prize in 2006 for his transformative work in micro-financing. Mohammed Yunus as a Transformational leader; Dr. Yunus’s transformational move, said Sen. Durbin, was to involve himself personally in the battle against poverty in Bangladesh....
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...Spandana Case Study: An Analysis This essay is based on the first randomized Impact evaluation of Microfinance. Section 1 explains the methodology of the study, Section 2 presents the data analysis and results, Section 3 presents the Caveats to be considered while interpresting the results, Section 4 presents some conclusions derived from the study and Section 5 talks about how some of the problems identified with respect to MFIs can be addressed. In a paper named “Miracle of Microfinance: Evidence from a randomized evaluation”, Abhijit Banerjee, Esther Duflo, Rachel Glennerster and Cynthia Kinnan analyze the first randomized evaluation of the impact of introducing the standard microcredit group-based lending product in a new market. This study also follows the households over the longest period of any evaluation (three to 3.5 years after the introduction of the program in their areas) to trap impacts not only in the short run but also over the medium run. The results of this study compel us to think about the functional difference that the microfinance initiatives are making in the target community and whether it’s time to address this sphere of developmental finance with less fancy and more caution. SECTION 1: METHODOLOGY OF THE STUDY CONSTRUCTION OF THE RCT Baseline Survey A baseline neighbourhood survey (2005) was conducted to assess baseline conditions such as household composition, education, employment, asset ownership, expenditure, borrowing, saving, and any businesses...
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...“Yunus has changed, not his followers”. This is with this sentence that Grameen Koota’s managers synthetized the model of their microfinance organisation. Indeed, they argued right from the beginning that Grameen Koota was strictly following the Grameen methodology, as it had been conceived in its early days. Grameen Koota was then born to deliver, in a cost-effective and sustainable manner, affordable credit to the poor in Bangalore, making it possible for them to borrow money without being required any documentation, collaterals and transaction history. The purpose of this report will be to analyse how Grameen Koota institution integrates in the Indian framework of microfinance and financial inclusion. One knows the microfinance context in India has soon been dominated by Self-Help-Groups. Usually formed by 20 members, they work as a micro-bank which collect members’ savings and grant them loans. Many cultural and operational differences can be observed with the Grameen model where groups are ruled quite strictly by a MFO: savings are compulsory, loans are granted according to an inflexible logic and reimbursement are highly scheduled. Even though the Grameen classic model has seen the necessity to adapt itself – with the Grameen II model in 2001 – and in spite of India SHGs tradition, to what extent Grameen Koota strictly replicates the original Bengali Grameen model? Have the organization been inspired by Indian microfinance legacy? Is Grameen Koota model replicable? ...
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... In fact, most are illiterate and subject to exploitation and harassment by moneylenders, employers, and officials. Witnessing the terrible conditions faced by women working as weavers, stitchers, cigarette rollers, and waste collectors, Ela Bhatt began helping these women to organize themselves. In 1972, Ela Bhatt founded the Self-Employed Women's Association (SEWA) to bring poor women together and give them ways to fight for their rights and earn better livings. Three years after SEWA was founded, it had 7,000 members. Today it has a total membership of 700,000 women, making it the largest single primary trade union in India. Bhatt lead SEWA to form a cooperative bank in 1974 - with a share capital of $30,000 - that offered microcredit loans to help women save and become financially independent. Today the SEWA Cooperative Bank has $1.5 million in working capital and more than 30,000 depositors with a loan return rate of 94 percent. Through years of organization and strategic action, Ela Bhatt developed SEWA from a small, often ignored group into a powerful trade union and bank with allies around the world. During the last three decades, SEWA's efforts to increase the bargaining power, economic opportunities, health security, legal representation, and organizational abilities of Indian women have brought dramatic improvements to hundreds of thousands of lives and influenced similar initiatives around the...
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...Development Franchising as a Social Innovation: When Entrepreneurial Expertise is Lacking Isaac H. Smith David Eccles School of Business University of Utah Kristie K. Seawright Marriott School of Management Brigham Young University Contact: Isaac H. Smith; isaac.smith@business.utah.edu; (T) 801-518-2991; 1645 East Campus Center Drive, 22 KDGB, Salt Lake City, UT 84112 Promoting entrepreneurship in “developing” nations has become a popular strategy for alleviating poverty and stimulating economic development (Khandker, 2005). For example, the worldwide proliferation of microfinance institutions is based on the assumption that providing individuals with better access to financial capital will fuel entrepreneurship and microenterprises, providing opportunities for people to work their way out of poverty. The results of such efforts, however, have been mixed (Snow & Buss, 2001), in part, because not all microfinance borrowers have the entrepreneurial skills sufficient to make a microenterprise succeed (Karnani, 2007a). Cross culturally, successful entrepreneurs have been shown to possess a different set of knowledge structures, or mental schema, than non-entrepreneurs (Mitchell, Smith, Seawright, & Morse, 2000). Interestingly, franchisees—often considered to be entrepreneurs (e.g., Baucus, Baucus, & Human 1996; Grunhagen & Mettelstadedt, 2005)—have been found to have entrepreneurship-related knowledge structures more closely resembling non-entrepreneurs than entrepreneurs...
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...work in the field and those who simply take minor interest. However, recently, the concept of microlending—or microcredit—has seen a bit of disapproval from experts in international aid and lending. Many people, on the other hand, have an optimistic amount of faith and approval for the idea of microlending and that support is not warranted. Microcredit is pretty typical of the micro approach to aid and is greatly supported by William Easterly. This is the type of program that very literally delivers aid in small amounts in hopes of accomplishing the great feat that is ending poverty. Although the amount of initial aid is small, the incentive it offers can lead to a successful social program. If an individual is given the opportunity to receive a loan, then there is an incentive that if one works hard and is successful, they have the chance to no longer live in poverty. Again, this is the type of aid that Easterly supports in his writings and theories as far as international aid goes. I personally believe that William Easterly and Mohammad Yunus are on the right track when it comes to sticking by microlending. The pros greatly outweigh the cons, and the benefits can be so significant that it would be silly and juvenile to write off a project with so much potential this early on in the game. While I understand where Dean Karlan is coming from when he says that “Microcredit is not transformational” [Bennett, 2009], I do think given time and trial it has the potential to be. And—thus...
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...PHIL 2050-006 4/21/2011 MicroFinance Microfinancing is a system that provides small loans to some of the poorest communities in underdeveloped countries all over the world. The ultimate goal of microfinancing is to help the poor pull themselves out of poverty. In America, people typically use loan money to increase their assets. These assets could consist of a starting a business or making an investment with the expectation of gaining a return; they do not typically use the money to purchase the basic necessities of life. However, in underdeveloped countries, residents take out loans through the concept of microfinancing to get through their everyday life. My thesis states that there is a common misconception that Microfinancing Institutions (MFIs) only loan money to poor people in order for them to start a micro enterprise (also known as a small business). With this misconception, people do not acknowledge the fact that they live a significantly different lifestyle than those in underdeveloped countries. In this paper, I argue that despite the lack of increased income that an investment may bring, (to someone in a developed country), microfinance is very beneficial to the poor by providing the ability to maintain financial stability. MFI’s are beneficial to those in underdeveloped countries in three ways: maintaining basic needs, paying for health and family emergencies, and empowering women. A major problem in understanding the financial impact of these...
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...Grameen Bank Voluntary Social Systems in action Bangladesh Population: 145 million Capital: Dhaka (11 million) More than half the population is landless After the war, returned to Bangladesh Ph. D. in Economics Vanderbilt Univ Nashville, TN Tried working in the Govt, resigned in two months. Taught at Tenesse State and in Colorado Chairman of Dept of Economics, Chittagong University Dr. Mohammed Yunus Motivation “I felt extremely ashamed of myself being part of a society which could not provide $26 to forty-two able, skilled human beings who were trying to make a living.” Dr. Yunus, testifying before the U. S. Congress Select Committee on Hunger, in a hearing devoted to microcredit Target Customers The Landless No Collateral No Guarantee Customers are never taken to court for default Target Customers The Landless Villagers whose No Collateral families were “functionally No Guarantee landless,” didn’t own enough land to live off for most of the year. Customers are never taken 0.4 acres upper limit. court for default to Ownership Owned by Borrowers (94%) Govt (6%) Money Disbursed $5.25 billion Disbursed $4.64 billion Repaid $425.15 million in 2005 $585 million Projected in 2006 Loan Recovery Rate 99.01% In 1996, Grameen’s repayment rate of 97% was considered comparable to Chase Manhattan’s rate. Borrowers 5.58 million 96% women Rani’s husband: “If the bank...
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...: MRS ISOBEL WOOD DR TERESKA KARRAN Coursework Feedback & Assessment Module Code Student Name: Student ID Number: Submission Date: 20 January 2012 Assignment 1 Research Title: Microcredit and Poverty Eradication; a further investigation in Village Tajpur, Bangladesh: A case study approach. Background of the research: Microfinance has emerged in 70s and officially displayed in 1981 through the establishment of Grameen Bank (GB) by noble laureate Muhammad Yunus in Bangladesh, a south-east Asian country (Grameen-info, 2011). In last three decades, more than 100 countries have adopted microfinance for socio-economic development through reducing poverty (Money, 2011). Microfinance is the combination of three domains of financial support—micro-insurance, micro-savings and microcredit where the third one is initially provided to poor for poverty reduction. In recent years, the theory has been controversial tremendously. The prime minister of Bangladesh, sheikh Hasina viewed that Microcredit has been proved completely unable to reduce poverty even it is sucking the blood of the poor (NY times, 2011). Another scholar, the professor of Manchester University Hulme, (2007) viewed that microcredit even could not scratch the surface of the poverty. The report of World Bank, (2005) also supports the view of above scholars that 124 million people in the world live under $1.25 each day where group of poor is defined as extreme...
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...with the sole objective of turning the Grameen philosophy into reality by working alongside those struggling to remove poverty. Grameen Trust is committed to the cause of poverty alleviation, promoting the Grameen Bank Approach (GBA) and providing financial and technical support to Grameen Bank Replication Projects (GBRPs) worldwide. It also directly implements microcredit programs in areas where there is no sustainable microcredit project for the poorest. Grameen Trust has a lot of Donor Partners, such as Rockefeller Foundation, UNCDF, World Bank, USAID, UNHCR, Citigroup Foundation, Commonwealth Secretariat, Whole Planet Foundation etc. Grameen considers "Credit as a human right". That is the reason why Grameen Trust is doing such a successful job through expanding its global operation of establishing sustainable microcredit programs for poverty alleviation around the world. GT has 141 partners in 38 counties all over the world, in America, Europe, Africa, Asia and Pacific. Vision: Grameen Trust envisions a poverty free world. Mission: To reduce poverty primarily through the promotion of poverty focused microcredit programs around the world following Grameen Bank Approach. Objectives: - To support and promote GB type programs to reduce poverty - To publish materials aimed at disseminating information about Grameen Bank Replication Programs (GBRP) and drawing the attention of all concerned to the deep rooted problems of poverty - To provide training and technical...
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