...CHAPTER ONE INTRODUCTION 1.1 Background of the Study Many people in developing countries neither have their own bank accounts nor are they able to take out loans, transfer money or insure their families against risks such as illness, accident or death. In most cases, access to these financial services that are so central to sustainable development are either denied or made very difficult. Consequently, people frequently have no choice but to resort to local moneylenders who charge usurious rates of interest or use informal and, therefore, insecure ways of performing transactions such as payments and money transfer. The above is reflected in the quotation by the past Secretary-General of the United Nations: ‘‘The stark reality is that most people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector. Together, we can and must build inclusive financial sectors that help people improve their lives (United Nations, 1997).’’ With almost thirty per cent of the country's population living in poverty, the Government of Ghana clearly faces an enormous challenge to reduce poverty especially in the three northern savannah regions where there is the greatest concentration of poor people. To achieve rapid and sustainable reduction in poverty, it is necessary to have an integrated policy with the various...
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...7 1.4 Objectives 7 1.5 Hypothesis 7 2.0 Literature Review 8 2.1 Kenya's Horticultural Sector at a Glance 9 2.1.1 Horticultural Leading Products 10 2.1.2 Top Importers 10 2.1.3 Private Sector Drive 10 2.2 Kenyan Contract Farming At a Glance 11 2.2.1 Definition of Contract Farming 11 2.2.2 Contract Groups 12 2.3 Supply of Microfinance 14 2.4 Types of Enterprises Engaged In By Microfinance Clients 15 2.5 Effect of Microfinance Services on Agribusiness-Oriented Small Scale Enterprises 15 3.0 Methodology 16 3.1 Area of Study 16 3.2 The Sample 16 3.3 Data Collection 16 3.4 Demographic Details for both Study Areas 17 3.5 Data Analysis 18 4.0 Work Schedule 19 5.0 Budget 20 6.0 References 21 7.0 Appendices 23 7.1 Appendix 1: Preliminary Data Analysis: Interview Questions 23 7.2 Appendix 2: Thematic Data Analysis 24 Abstract Micro-financing refers to the provision of financial services to individuals and groups which are not included in the formal financial systems based not only on assets and security but also other demographic, cultural, social, and gender constraints (Sindi, 2008). Microfinance institutions are those informal financial systems offering such services. Studies on Agribusiness Oriented Small Scale Enterprises in Kenya have reported that access to formal finance; supply inputs; and marketing quandaries are the three principal limitations which hamper agricultural growth and development in the country. A recent research...
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...Microfinance From Wikipedia, the free encyclopedia Jump to: navigation, search This article may be too technical for most readers to understand. Please help improve this article to make it understandable to non-experts, without removing the technical details. The talk page may contain suggestions. (January 2010) Community-based savings bank in Cambodia. There are a rich variety of financial institutions which serve the poor. Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services. More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."[1] Those who promote microfinance generally believe that such access will help poor people out of poverty. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Although microcredit is one of the aspects of microfinance, conflation of the two terms is endemic in public discourse. Critics often attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few...
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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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...Freedom (2009), and the recipient of 26 honorary doctorate degrees and more than sixty other special awards. There is little to no doubt that the man is accomplished, hailed as the father of microcredit and a pioneer of microfinance. However, his success lies in something seemingly marginal and that much more brilliant, which distinguishes him as an intellectual and a thinker worthy of a place on the thinkers.com top 50 list. The idea of microcredit was first brought to light by Dr. Akhtar Hameed Khan (founder of the Pakistan (now Bangladesh) Academy for Rural Development). Yunus, a follower of Dr. Khan’s work, sought to implement the concept as a unique social business model aiming to eradicate poverty, starting with Bangladesh. With banks refusing to provide loans to ‘high-risk’ markets, Yunus felt that the poor were left at a disadvantage, unable to escape the grip of poverty. “To Muhammad Yunus, micro-credit must be seen as an action for the promotion of the entrepreneurial capacity of disadvantaged families, elimination of informal markets, creation of income and well-being for citizens.” (Microfinance Africa) As such, he set out to establish the Grameen Bank. The Grameen Bank seeks to improve the lives of the poor by providing access to microfinance and technology. The foundation...
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...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 currently...
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...State of Microfinance in Bangladesh Prepared for Institute of Microfinance (InM) As part of the project on State of Microfinance in SAARC Countries By Dewan A. H. Alamgir 2009 Disclaimer Any opinions expressed and policy suggestions proposed in the document are the author’s own and do not necessarily reflect the views of Institute of Microfinance (InM). The report also does not represent the official stand of the Government of the countries studied. 2 | State of Microfinance in Bangladesh List of Acronyms ADB ASA BBS BDT BEES BIDS BKB BMDA BRAC BRDB BSBL CARB CBO CBN CDF CFPR CIDA COSOP CPD DANIDA DFID DOL DOF EC FSP FSS FY GB GDP GOB HCP HIES IBBL IFAD IGA IGVGD InM JC LGED ME MFMSP Asian Development Bank Bangladeshi NGO (formerly Association for Social Advancement) Bangladesh Bureau of Statistics Bangladesh Taka Bangladesh Extension Education Services Bangladesh Institute of Development Studies Bangladesh Krishi Bank Barind Multi-Purpose Development Authority Building Resources Across Communities (Largest NGO) [Formerly Bangladesh Rural Advancement Committee] Bangladesh Rural Development Board Bangladesh Sanchya Bank Limited Center for Agricultural Research-Barind (a Bangladeshi MFI) Community Based Organization Cost-of-basic-needs Credit and Development Forum Challenging the Frontiers of Poverty Reduction Programme Canadian International Development Agency Country Strategic Opportunities Paper (of IFAD) Centre for Policy Dialogue Danish International...
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...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 human rights and development Microcredit: Is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the...
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...Sustainable Microentrepreneurship: The Roles of Microfinance, Entrepreneurship and Sustainability in Reducing Poverty in Developing Countries GUY VINCENT CONTENTS 1. INTRODUCTION 2. THE RELATIONASHIPS BETWEEN MICROFINANCE, ENTREPRENEURSHIP AND SUSTAINABILITY IN REDUCING POVERTY IN LDCS 2.1. THE ROLE OF MICROFINANCE IN REDUCING POVERTY IN LDCS 2.2. THE ROLE OF ENTREPRENEURSHIP IN REDUCING POVERTY IN LDCS 2.3. THE ROLE OF SUSTAINABILITY IN REDUCING POVERTY IN LDCS 3. SUCCESSFUL CASE STUDIES OF MICROFINANCE, ENTREPRENEURSHIP AND MICROFINANCE IN REDUCING POVERTY IN LDCS 4. EFFECTS OF SUSTAINABLE MICROENTREPRENUERSHIP ON LDCS 5. CONCLUSION 6. REFERENCES 1. INTRODUCTION About 90 percent of the people in developing countries lack access to financial services from institutions, either for credit or savings1, which further fuels the “Vicious Cycle of Poverty” (refer to Fig. 1). If the people of LDCs have a limited capacity to invest in capital, productivity is restricted, incomes are inhibited, domestic savings remain low, and again, any increases in productivity are prevented. A lack of access to financial institutions also hinders the ability for entrepreneurs in LDCs to engage in new business ventures, inhibiting economic growth, and often, the sources and consequences of entrepreneurial activities are neither financially nor environmentally sustainable (existing for continuing future use). Microfinance serves as a means to empower the poor, and provides a...
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...EFFECTS OF MICROFINANCE CREDIT ON THE PERFORMANCE OF SMALL AND MEDIUM ENTEPRISES IN UASIN GISHU COUNTY, KENYA RESEARCH PROJECT SUBMITTED TO CUEA, GABA IN PARTIAL FULFILLMENT FOR THE AWARD OF BACHELORS DEGREE EFFECTS OF MICRO FINANCE CREDIT ON THE PERFORMANCE OF SMALL AND MEDIUM ENTREPRISE IN UASIN GISHU COUNTY, KENYA BY KIBET K DENNIS BCOM/GC/543/11/12 RESEARCH PROJECT SUBMITTED TO CUEA, GABA IN PARTIAL FULFILLMENT FOR THE AWARD OF BACHELORS DEGREE DECLARATION Declaration by the Student I, the undersigned, declare that this project is my original work and that it has not been presented in any other university or institution for academic credit. KIBET K DENNIS BCOM/ GC/543/11/12 Signature.................................................... Date.................................... Declaration by the Supervisors This research project has been submitted for examination with our approval as university supervisors. Dr. Gedion Omwono Catholic University of Eastern Africa, GABA Campus Signature.................................................... Date.................................... ABSTRACT This study discusses...
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...China Microfinance Industry Assessment Report By He Guangwen, Du Xiaoshan, Bai Chengyu, and Li Zhanwu China Association of Microfinance Feb. 17, 2009 This report has been jointly accomplished by Prof. He Guangwen, Director of Rural Finance and Investment Research Center of China Agricultural University (CAU), Prof. Du Xiaoshan, Deputy Director of Rural Development Institute of China Academy of Social Sciences (CASS) and Chairman of Board of Directors of China Association of Microfinance (CAM), Mr. Bai Chengyu, Director of Division III of China International Centre for Economic and Technical Exchange (CICETE) and Secretary General of CAM with the support of the Network Strengthening Program (NSP) of CAM. Mr. Li Zhanwu, Division Director of Ministry of Human Resource and Social Security, Dr. Li Lili of Henan University of Finance and Economics, Dr. Zhang Zhengping, Associate Professor of Beijing Technology and Business University, Dr. Yang Jing of Beijing Material College, and Li Yaning, Yang Lu and Wang Dan from CAU have also joined the research work. Besides, this report has obtained the guidance and assistance from Ms. Wang Dan, Managing Deputy Secretary General of CAM, and the experts of SEEP. Mrs. Wang Li, President of Social Responsibility Department of Citi China has provided strong administrative and professional support. Hereby, special thanks should be given to the above fellows. For more information, pls contact Prof. He Guangwen at heguangwen@sina.com 1 ...
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...Microfinance in Assam: Hymns, Myths and Realities. Dr. Jyotish Bordoloi, Associate Professor, Haflong Govt. College. Ms. Brahnisikha Bordoloi,Assistant Professor, Lakhimpur Commerce College. Introduction: Microfinance has emerged as an effective method to fulfil the financial needs of small borrowers and poor sections of the society to uplift their economic conditions. In spite of creditable expansion of institutional credit network in our country majority of poor and rural population remained scarce in getting financial assistance from formal credit delivery institutions. Many credit intervention programmes floated by the government are found to be expensive, ineffective and defective. Indian experience revealed that steps taken to address the poor and poverty have not been yielding the desired result and considerable portion of aids and subsidies meant for the poor are channelized to affluent sections. Institutional mechanism involved in financing the poor through different developmental schemes unsuccessful in doing much to improve the situation and in fact many new problems arise in course of doing so. Poor recovery and siphoning of funds meant for poor have affected not only the viability of developmental schemes but also the profitability of the institutions. The shortcomings and failures of financial institutions and poverty alleviation and development programmes to meet the needs of needy small and poor borrowers kindle the micro finance concept. The...
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...AMRITA BUSINESS SCHOOL, BENGALURU | MICROFINANCE INSTITUTIONS | MARKET RESEARCH PROJECT | | | Contents LIST OF TABLES 2 INTRODUCTION 2 WHY MICROFINANCE? 3 MICRO FINANCE SERVICE PROVIDERS 4 THE EMERGENCE OF PRIVATE MICROFINANCE INDUSTRY 4 MICRO FINANCE IS ALL AROUND US 5 LITRETURE REVIEW 6 SUMMARY OF Y. H. MALEGAM COMMITTEE REPORT 2011 14 Why Malegam Committee Report was Set up? 15 Key recommendation 16 PROFIT AND NON PROFIT ORGANIZATION 21 Differences between for-profit MFI’s and non-profit MFI’s 23 For Profit MFI 23 Non Profit MFI 24 METHODOLOGY 25 CAPITAL STRUCTURE AND ASSET ALLOCATION 25 DEPTH AND BREADTH OF OUTREACH 27 EFFICIENCY 28 PRODUCTIVITY 29 QUALITY OF THE PORTFOLIO 31 ANALYSIS OF NUMBER OF ACTIVE BORROWERS 33 PROFITABILITY AND SUSTAINABILITY 35 CONCLUSION 36 REFERENCES 36 LIST OF TABLES Table 1 Table of Comparision 12 Table 2 Comparison of Debt Equity Ratio 25 Table 3 Debt Equity Ratio 26 Table 4 Comparison of Depth and Breadth of MFIs for the year 2012 with 2010 27 Table 5 Comparison of Depth and Breadth of MFIs for the year 2011 with 2010 27 Table 6 Operating Expense / Loan Portfolio 28 Table 7 Industry Standard for Operating Expense / Loan Portfolio 29 Table 8 Productivity of MFI’s for the year 2010 29 Table 9 Productivity of MFI’s for the year 2011 30 Table 10 Industry standards for year 2010 30 Table 11 Quality of portfolio for the year 2010 31 Table...
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...The introduction of microfinance banks in Nigeria is the inability of Nigerian Deposit Money Banks to provide sufficient financial service to the rural poor. Microfinance banks have taken up the challenges of the gap created by the Nigerian Deposit Money Banks. Microfinance banks can be seen as an economic growth method intended to advantage the low income part of a given country like Nigeria, both rural poor and urban poor. Since the advent of microfinance banking in Bangladesh in the mid 1970’s, several countries have copied this financing model. The Nigerian governments over the years have had to grapple with poverty and unemployment. The realization that many of these poor and/or unemployed persons are not without skills, ideas and willingness to work, must have propelled the government to make finance accessible to them The seeming popularity of this model among developing countries is predicated on poverty reduction prospect it offers. The Nigerian government cued into this popular thinking in 2005 when it inaugurated the microfinance banking scheme. This was founded to provide finance to economically active poor excluded from financing by conventional banks, provide employment, engender rural development and reduce poverty. This paper theoretically examines the impact of this institutions to Nigeria as a country. International Journal of Finance and Accounting Concept of Microfinance Microfinance pertain to the lending...
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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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