...Isabel Perez Case Study 5: Sandra Baquero Design Homework Analysis Creativity in Business 1. Why did Sandra Nieto turn to microlending as a source of capital for his business? Sandra Nieto learned about microlending from a friend in Columbia. Ultimately, Sandra did not have another option because she didn’t have the funds needed to design. As a result of her being an immigrant, she could not obtain a credit history which take her chances away from ever going to a bank. She was an illegal immigrant and she did not have a credit history. 2. What factors made Sandra’s company a business that did not qualify for mainstream financing (specifically discuss the C’s of credit)? The five C’s of credit are collateral, character, capacity, capital and conditions. Collateral which is the property/assets pledged against the loan that the lender can take and sell of the loan is not repaid. Character represents how well qualified she is to borrow money. This was hard for her to do because she did not have any money. You also have capacity, which is the business cash flow that must be sufficient to cover the monthly loan payments. The money she earned from working and selling her work went to daily costs. In order for banks to consider someone they need to know what is owned, owed and what the details to the business financials are such as conditions. Capital typically represents what is yours or the owners. 3. When, if ever would you advise Sandra to approach mainstream...
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...Could Microfinance Be the End of Poverty? Lending money to a small business or individual that may or may not be able to repay the debt can be complex and lead to banks having to make difficult decisions. Lenders are known for acting with caution and avoiding a risky investment, yet millions of people worldwide are gaining access to capital. These small corporations or family owned start-ups are using microfinance institutions to supply them with the necessary loans they need for various business or personal expenses. The ability of these applicants, who otherwise would have never been approved, to gain the funding through microcredit loans has had a remarkable impact globally. Heads are turned, and many ask the question “Could microfinance be the solution to help end poverty?” Historically, many businesses have faced difficulty with applying for a loan. Bankers are renowned for requiring a huge amount of paperwork and proof of income, insurance, etc. This can be a time consuming and stressful process. Some investors expect that the company asking for the loan will be unable to provide the documents that are required and therefore will be denied. While lenders are able to adjust such details as interest rates and length terms for their own benefit, they are hesitant to take an applicant that will put the repayment at risk. The economic shifts have had an impact on the lives of people worldwide. Small companies are unable to support the cost of staying open and many eventually...
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...rating/s and should be read in conjunction with our Credit Opinion. The most recent ratings, opinion, and other research specific to this issuer are provided on Moodys.com. Click here to link. Analysis SOUTH AFRICA Europe/M.East/Africa January 2006 Contact Limassol Phone 357.25.586.586 Mardig Haladjian George Chrysaphynis Capitec Bank Limited Strategy and Competitive Position A YOUNG AND SMALL INSTITUTION EXPERIENCING RAPID GROWTH Although Capitec Bank is one of the main players in the South African microlending industry1 and has an estimated 10% share of the market (40% share of the one-month loans market), it remains a very small institution even by local standards (total assets of USD 137mn as at February 2005, one-tenth the size of African Bank, the largest microlender). We do see possible risks in the development stage of a young institution growing at a rapid rate, but we take comfort from its good understanding of the microlending business, its careful risk management, prudent approach to liquidity, good information systems used to manage the risks and supervision by the SARB.2 TECHNOLOGY-DRIVEN, EFFICIENT PROVIDER OF BANKING SERVICES TO LOW-INCOME EARNERS We believe that Capitec’s technology-driven business model is the right approach to serving the low-income-earning population. The bank has strong front-end information technology, including the paperless (no forms to fill, tasks are carried out electronically) and cashless (using ATMs and drop-safes)...
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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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...Money, Banking, and the Financial System, 2e (Hubbard/O'Brien) Chapter 1 Introducing Money and the Financial System 1.1 Key Components of the Financial System 1) The financial system is primarily a means by which A) funds are transferred from savers to borrowers. B) money is put into circulation. C) the government puts into operation its plans for the economy. D) business firms distribute their goods. Answer: A Diff: 1 Page Ref: 4 Topic: financial system Objective: Identify the key components of the financial system AACSB: Reflective Thinking 2) Which of the following is NOT a financial asset? A) a bond issued by Google B) Wells Fargo Bank C) a home mortgage loan D) a certificate of deposit Answer: B Diff: 1 Page Ref: 2 Topic: financial assets Objective: Identify the key components of the financial system AACSB: Reflective Thinking 3) If you buy a bond issued by Intel, the bond is a(n): A) liability to Intel and an asset to you. B) liability to you and an asset to Intel. C) liability to both you and Intel. D) asset to both you and Intel. Answer: A Diff: 2 Page Ref: 4 Topic: financial assets Objective: Identify the key components of the financial system AACSB: Reflective Thinking 4) Which of the following forms the largest share of household holdings of financial assets? A) corporate equities B) bank deposits C) pension funds reserves D) life insurance Answer: C Diff: 1 Page Ref: 9 Topic: financial assets Special Feature: Making the Connection...
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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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...The Fortune at the of the SECURITY AND S T R AT E GY Bottom Pyramid by C.K. Prahalad and Stuart L. Hart content strategy & competition Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor. 1 With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income...
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...strategy+business The Fortune at the Bottom of the Pyramid by C.K. Prahalad and Stuart L. Hart from strategy+business issue 26, first quarter 2002 © 2002 Booz Allen Hamilton Inc. All rights reserved. e-Doc The Fortune at the of the Bottom Pyramid by C.K. Prahalad and Stuart L. Hart SECURITY AND S T R AT E GY content strategy & competition Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor. 1 With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade...
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...strategy + business issue 26 The Fortune at the of the SECURITY AND S T R AT E GY Bottom Pyramid by C.K. Prahalad and Stuart L. Hart content strategy & competition Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor. 2 With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world...
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...BTPN can expedite the repayment process by automating it through technology. BTPN’s business model BTPN provides pension loans for civil servants, savings deposits for middle and high-income Indonesians, and micro-loans for poor Indonesian entrepreneurs. BTPN builds bank branches close to pasars with a simple and repeatable franchise model, subsequently carefully selecting employees whom undergo rigorous training. BTPN monitors the performance of both their employees and customers with state of the art technology, such as a standardized “dashboard” and EDC mobile devices. BTPN also provides additional services for their customers such as education, consultation, and training. BTPN’s current microfinance process To begin the microlending process, a potential customer submits a loan application to the local branch. At the branch, a loan administrator checks the application for completeness and uploads a scanned image to the central loan system. Then a credit officer performs a field survey to confirm assets, observe operations, assess character, and the customer’s ability to repay....
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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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...en.wikipedia.org http://en.wikipedia.org/wiki/Microfinance Microfinance [hide]This article has multiple issues. Please help improve it or discuss these issues on the talk page. This article may be too technical for most readers to understand. (January 2010) Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are: (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group. In some regions, for example Southern Africa , microfinance is used to describe the supply of financial services to low-income employees, which is closer to the retail finance model prevalent in mainstream banking. Community-based savings bank in Cambodia. There are a rich variety of financial institutions which serve micro-entrepreneurs and small businesses. For some, microfinance 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] Many of those who promote microfinance generally believe that such access will help poor people out of poverty, including participants in the Microcredit Summit...
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...While the impact of globalisation maybe hotly contested, with its proponents claiming extraordinary benefits for mankind and its opponents stressing disproportionate benefits for the rich, and marginalisation and disempowerment of the poor, for countries such as Bangladesh with low income, smaller capacities and even lesser bargaining turf, globalisation has thrown up a host of challenges with great rapidity. And yet we continually strive to integrate into a globalised world whilst balancing our national agenda of democracy, development and trade. While speaking on Bangladesh, since coming here as Bangladesh’s High Commissioner I have come to realize, increasingly and sadly as time has gone by, that Bangladesh is often bypassed and when discussed or referred to in the South Asian context, the emphasis more often than not is on negative elements. Overcoming certain misperceptions about my country and bringing it out of the ugly shadows generated by misinformation, sometimes seem in itself the biggest challenge to me. However, whatever we as a nation have achieved since our independence have come as part of our victories in our persistent struggle on numerous fronts in an increasingly globalized world. As it traversed the oceans of fire and blood during its long struggle for national independence, across the barren desert of autocratic rule and overcoming the horrendous calamities wrought by nature’s wrath, Bangladesh has manifested, if nothing else, its indomitable...
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...From the Editors A recent cover story published by one of the most inºuential magazines in the world, the Economist (March 12–18, 2005), revealed for its readers the “Real Digital Divide.” The lead essay (written primarily by technology editor Tom Standage) pointed to an unexpected shift in the world’s attention from computers as the main technology deªning the digital divide to the cell phone. The tone of the article, characteristically, was that of a scold pointing to old shibboleths that have been proven false. First, readers were warned that one proposal to resolve the digital divide—creating a global infrastructure fund focused on computers and the Internet—was especially misguided. According to the authors, markets work better. Second, readers were admonished to shift their attention from the Internet to the increasingly ubiquitous cell phone. The Economist is right in insisting that ICT for development policies need to be constantly reevaluated in light of the current best research ªndings. For example, it takes a justiªably critical look at an overreliance on telecenters as the once-favored answer to digital divides. At the same time, the Economist commits similar errors of oversimpliªcation of which it accuses others. It creates a straw man (in the form of an Internet-for-development evangelist), which it then easily knocks down. It accomplishes this by substituting one kind of new technology, mobile phones, for another kind of new technology. It may well be that the...
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...Grameen Bank: Taking Capitalism to the Poor Evaristus Mainsah* MBA ’04 Schuyler R. Heuer MBA ’04 Aprajita Kalra MBA/MIA ’04 Columbia Business School Columbia University School of International and Public Affairs Qiulin Zhang MPA ’04 Columbia University School of International and Public Affairs This paper was written as part of the course Emerging Financial Markets taught by David O. Beim, professor of professional practice, at Columbia Business School in fall 2003. The authors are grateful for his invaluable feedback. © 2004 by The Trustees of Columbia University in the City of New York. All rights reserved. CHAZEN WEB JOURNAL OF INTERNATIONAL BUSINESS SPRING 2004 www.gsb.columbia.edu/chazenjournal * Corresponding author (EMainsah04@gsb.columbia.edu). Executive Summary In the early 1970s, Professor Muhammad Yunus envisioned a means of alleviating poverty by circumventing the major impediment to lending to the poorest in society—the need for collateral. He tested this instinct in an experiment in 1976, when he lent about $27 to 42 women in an ordinary Bangladeshi village. Just 30 years later, Grameen Bank has more than 3.2 million borrowers (95 percent of whom are women), 1,178 branches, services in 41,000 villages and assets of more than $3 billion. This paper explores Grameen Bank’s origins, structure, culture, performance and efforts to expand and broaden the microfinance agenda. The authors evaluate Grameen’s success in implementing Yunus’s vision...
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