What is Micro Finance Section 8 Company
Microfinance in Developing Countries
1. Dilemmas and Directions in Microfinance Research
Associating microfinance with alleviation of poverty has become a truism. Subsequently, the microcredit movement has enjoyed wide support from governments, international development agencies, wealthy philanthropists, renowned financial institutions and even the Noble Peace Prize Committee. Indeed, in awarding the Nobel Peace Prize to Muhammad Yunus and Grameen Bank in 2006, the committee noted that "Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty". Consistent with this trend, success stories abound on the internet and in countless reports of microentrepreneurs who set up successful businesses, lifting their families and neighboring poor out of poverty.
Ronny Manos, Jean-Pierre Gueyie, Jacob Yaron
2. Microfinance and Microenterprises ’Financing Constraints in Eastern Europe and Central Asia
We study whether microfinance institutions (MFIs) have improved the availability of credit to microenterprises in Eastern Europe and Central Asia (ECA) in the first half of the past decade. Our approach is different from that of a typical microfinance impact study, which focuses on evaluating social or economic impact of a single MFI (or product). Our motivation is closer to the financial sector development microfinance schism ’that requires MFIs to lend to poor entrepreneurs who already have the skills and the markets but lack credit (Conning, 1999). Countries in the ECA region are appropriate for such an approach because, during the study period, they had an educated but impoverished population and limited credit supply.
Valentina Hartarska, Denis Nadolnyak, Thomas McAdams
3. Through the Thicket of Credit Impact Assessments
The remarkable growth in microlending during the past four decades has been accompanied by numerous credit impact assessments that initially reported microloans were quite effective in alleviating poverty.2 More recently, however, a variety of studies have reported increasingly mixed results, ranging from showing loans to be highly successful in alleviating poverty, to credit being somewhat successful in this regard, to credit having little impact on poverty, to claims that more credit may even be making borrowers worse off. An explanation for these various results might be found in the problems involved in documenting credit impact. In Section 2, we briefly summarize the findings of numerous impact assessments. Section 3 discusses the major problems faced by those doing these evaluations. In Section 4, we offer our explanations for the widely diverse results that are being reported. Section 5 suggests that many features of credit impact may be immeasurable, that consumers ’actions may be the best indication of the benefits they realize from borrowing, and goes on to propose an alternative method to assess the impact that focuses on jobs creation. Placing more emphasis on jobs might, in turn, require the microfinance industry to rethink its concerns about mission drift and graduation of successful borrowers, and instead capitalize on its opportunities to go up-market and support small enterprises that grow and hire more people. Section 6 provides conclusions.
Dale W Adams, Robert C. Vogel
4. Assessing Microfinance: Striking the Balance Between Social Utility and Financial Performance
Microfinance was designed as a development tool, but remains firmly anchored in the market economy, creating an ambivalence that blurs the traditional distinction between the political and economic, the public and private, the commercial and social. Its hybrid nature makes it unique among development tools: microfinance benefits from financial, fiscal and regulatory support, while maintaining relative independence from governments and donors and their fluctuating agendas. The result is a heterogeneous and complex sector that articulates different scales: the local, given it is microfinance, and the national, as states closely supervise retail-banking activities. But it is also a global field, involving various transnational actors: NGOs, cooperation agencies, investors, private entrepreneurs, multilateral agencies, and so on.
Florent Bédécarrats, Cécile Lapenu
5. Earnings Quality in the Microfinance Industry
Microfinance institutions (MFIs) supply financial services to micro-enterprises and low-income families. MFIs pursue the double bottom lines of social development and financial returns, and their funding is supplied by a range of sources from donations to commercial investments. Microfinance is thus an arena in which donors meet professional investors, and it has quickly developed into a large industry. Currently, more than 3000 MFIs report their numbers to www. Microfinancesumm it. Org and serve altogether more than 150 million people with microcredit. More than 100 international funds invest in MFIs, and microfinance is about to become an important asset class for investors, particularly those pursuing both financial and social returns (www.mixmarket.org).
Leif Atle Beisland, Roy Mersland
6. Culture and Governance in Microfinance: Desa Pakraman and Lembaga Perkreditan Desa in Bali
Preservation of its cultural and religious identity is a key concern in Bali. Finance is one of the spheres in which that identity has been challenged. The roots of that identity were planted some 500 years ago by Hindu princes who fled Islamization on Java and established a culture of Dharma Hinduism on Bali, incorporating elements of a pre-existing ancient Balinese culture. The result has been an ever-evolving blend of religion and ritual, temple architecture, arts and crafts, music and dance, family life and community associations - a blend characterized by variety and fluidity, which nowhere fits into a single fixed pattern (Geertz, 1959).
7. Crowd-empowered microfinance
Microfinance jump up approximately 40 years ago, changing many lives. As a vital financing opportunity in developing countries, it set the path for other alternative mechanisms to follow. In recent years another promising model has emerged, providing additional alternatives to traditional banking and financing institutions. Combined with the ever-increasing spread of the internet, this innovative financing mechanism is on the verge of making an impressive positive impact. This chapter will review this promising financing mechanism, crowdfunding, and will attempt to outline its relationships and synergetic integration with microfinance.
8. From a supply gap to a demand gap? The Risk and Consequences of Over-indebting the Underbanked
The microfinance sector is used to extensive debates about its mission.2 However, in one regard, the goal has always been clear: microfinance, whether or not it was impact focused and poverty focused, has always been about extending small-scale financial services to the underbanked. The aim has been to reach those who are not normally served by the formal financial system.
9. Financing Businesses in Africa: The Role of Microfinance
The law of diminishing marginal productivity dictates that scarce resources earn a high return. Why then, does capital not flow to the poor, its most productive users? This has been attributed in part to the failure of credit markets. The argument goes that the poor have so little to offer by way of collateral, and borrow such small amounts, that it is too risky and expensive to lend to them. The ramification is that they get caught in a credit-based poverty trap, wherein they are unable to undertake profitable investments due to credit constraints and hence, remain poor. The great promise of microcredit - making joint-liability loans to small groups of poor people possessing no collateral, enabling them to make productive investments - was to be the magic bullet against poverty. Yet, a mere five years after the Nobel Peace Prize was awarded to Muhammad Yunus and the Grameen Bank, claims about microcredit’s transformative power are being debated.
Shilpa Aggarwal, Leora Klapper, Dorothe Singer
10. Microcredit and Agriculture: Challenges, Successes and Prospects
Providing sustainable financial services for agriculture continues to be a challenge in spite of billions of dollars having been spent in subsidies to strengthen financial institutions to serve the sector. Critics have argued that the market-oriented reforms implemented after the collapse of the directed credit paradigm have failed because agriculture still receives a small share of total formal credit. Some advocate a rollback of reforms and a return to active governmental intervention, including the resurrection of state-owned agricultural development banks and the reintroduction of interest rate ceilings on agricultural loans.
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