Microfinance is provide broad range of financial services like deposits, loans, payment, services, money transfer and insurance to those who need loan. Our past centuries, practical visionaries, from the Franciscan monk was founded the community- oriented pawnshops of the 15th century to the founders of the credit union movement in the 19th century.
Today it is used to describe a selection of financial products such as payments, savings and insurance, that are adapted to meet the needs of low income individuals, businesses and NGOs. Micro-finance also serves people who do not have access to typical banking services.
Micro-finance is also Introduction microfinance idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services.
While some studies indicate that micro-finance can play a role in the battle against poverty, it is also recognized that is not always the appropriate method, and that it should never be seen as the only tool for ending poverty Poor people often do not have access to cost effective money-lending facilities and face having to take on often unaffordable fees and interest rates on loans available in their local community.
This limits growth and development, puts additional financial pressure on low income families and serves to perpetuate the cycle of poverty. Like borrowing, savings options for people in low income areas are only available through insecure and sometimes erratic schemes including credit associations, rotating savings and credit associations.
Financial insecurity denies families and businesses the opportunity to develop suitably, limiting the incomes of Introduction microfinance communities. Banks can make more money making large loans than small ones and the same is true for savings accounts.
This reality has started to shift in the past decade with some banks being established with the specific purpose of providing financial solutions to poor communities. Grameen Bank in Bangladesh and Bancosol in Bolivia are just two examples of financial institutions that were established to specifically benefit low income individuals, families, businesses and NGOs.
A number of different organisations have sprung up over the past ten years to fulfill this gap in the market. Ranging from NGOs and cooperatives to credit unions and self help groups which have provided new opportunities to people in impoverished communities who were previously unable to access credit facilities.
Families all over the world have grown to rely on remittances and money transfers sent home by friends and family, which these new financial institutions have enabled. In fact, income from family members abroad is one of the biggest contributors to economies in the developing world.
Mobile banking or M-Banking has pushed the envelope even further by providing the most immediate and accessible method yet to manage your money, a service that provides a lifeline to people living in isolated areas.
A growing body of evidence supports the work of micro-finance organisations in developing countries. Appropriate and affordable financial solutions have been shown to help build household assets, generate income, reduce risks and increase consumption. Political and economic leaders have also sought to reaffirm the value of micro-finance institutions as a means of uplifting the poor and providing cost effective financial services.
The people at the bottom of the pyramid have traditionally been the hardest to reach but new micro-finance options has worked to uplift some of the poorest people in the world.
In VietnamSave the Children clients reduced food deficits from three months to one month. The critical success factor in micro-finance services is simply whether clients have the capacity to repay the loan under the agreed terms. If people are unable to maintain these agreements such services can have the direct opposite effect with loaners situations being made substantially worse due to unaffordable payments.
Therefore, micro-credit should be carefully evaluated against the alternatives when choosing the most appropriate intervention tool for a specific situation. Have you accessed micro-finance as an individual?
Or have you sourced micro-credit to support your NGO? Let us know in the comments below.CHAPTER: 1 INTRODUCTION TO MICROFINANCE Introduction The Indian state put stress on providing financial services to the poor and underprivileged since independence. The commercial banks were nationalized in and were directed to lend 40 percent of their loan able funds at a concessional rate, to the priority sector.
External Audits of Microfinance Institutions A Handbook Volume 1 For Audit Clients: Boards, Managers, Donors, Creditors, and Investors Acknowledgments viii Acronyms and Abbreviations ix Chapter 1 Introduction 1 Audiences and uses for this handbook 3 Limitations of this handbook 4 An important caution 4 Chapter 2 Understanding.
Introduction to Microfinance Institutions (MFIs) Part I by Songbae Lee, Investments Senior Officer on March 14, I joined the Calvert Foundation investments team . Essay on microfinance and its advantages and disadvantages.
|Microfinance research paper||The report titled the Bharat Microfinance Report provides the latest data and statistics about the micro-finance sector in India. You can download the latest version of the report at the link below.|
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Sa-Dhan, India’s premier body of development finance institutions has released it’s latest report on the status of microfinance in India for the FY The report titled the Bharat Microfinance Report provides the latest data and statistics about the micro-finance sector in India.
The much anticipated report serves as a barometer of the sector for Indian [ ]. MicroFinance Aim to make a Difference Introduction Products Key Facilitators Contact Details Models NGO’s Related Links savings: which allow a lump sum to be enjoyed in future in exchange for a series of savings made now.