Enhancing Human Capital Through Microfinance Essay

2140 words - 9 pages

Enhancing Human Capital Through Microfinance |
Microfinance: Theories and Principal Eco:4343 |
Naureen Jahan 121091031 |
12/31/2011 |

C [ - 1 - ] | Pageontents
Objective - 2 -
Introduction - 3 -
The concept of microfinance - 4 -
The concept of Human Capital: - 5 -
Development of human capital concept - 5 -
Measurement of Human Capital: - 6 -
Element of Human Capital: - 6 -
MFIs in Enhancing Human Capital: - 6 -
Enhancing Human Capital through Health Services: - 6 -
Enhancing Human Capital through Education and Literacy: - 7 -
Enhancing Human Capital through Business Development Training: - 7 -
A few cross country policies taken by Microfinance ...view middle of the document...

Many poor participants may lack such skills and may benefit very little from micro-finance. So it is an essential element for poverty alleviation of poor. If there is rich human capital then poverty alleviation is easier. Therefore every developing countries and even developed countries work on building human capital. Human capital enhances a countries economy and the biggest example of this is China, due huge labor force and human capital Chinas economy is famous and world known. Human capital formation faces, however, severe obstacles. Because human capital cannot be seized and transferred to a lender in the event of default, it cannot be used as collateral; consequently, the poor must fund their educational choices out of their retained earnings, wealth, or abstention from current productive work. Because they are poor, the marginal cost of doing so may be prohibitively high (Ray, 1980).
When microfinance institutions give credits to the poor’s they start up a new business or expands their old business and these enhances human capital. And how microfinance enhances the human capital or what is the steps taken to build human capital will be discussed below.
The concept of microfinance
Until the 1980s only a handful of institutions offered credit and savings services to poor people in developing countries. Today microfinance institutions number more than 7,000 worldwide, a level unimaginable 20 years ago. Yet while microfinance services have grown, so have the number of poor. In Sub-Saharan Africa about 48 percent of the population lives on less than US$1 per day. In South Asia alone, more than half a billion people still live below the poverty line. As policymakers look toward financing innovative programs that help curb the growth of burgeoning poverty, microfinance can offer some hope—but only if policymakers and development practitioners understand the services that the poor demand and if they can learn from the experience of government and nongovernmental programs that have allowed innovation to flourish and the particular finance needs of the poor to take center stage.

Microfinance is constituted by a range of financial services for people who are traditionally considered non bankable, mainly because they lack the guarantees that can protect a financial institution against a loss risk.
The true revolution of microfinance is that this tool gives a chance to people who were denied the access to the financial market opens new perspectives and empowers people who can finally carry out their own projects and ideas with their own resources, and escape assistance, subsidies and dependence. Microfinance experiences all around the world have now definitely proved that the poor demand a wide range of financial services, are willing to bear the expenses related to them and are absolutely bankable.
The target group of microfinance is not constituted by the poorest of the poor, who need other interventions such as food and health security, but...

Other Essays Like Enhancing Human Capital Through Microfinance

Microfinance Institutions Performance In Pakistan Essay

2121 words - 9 pages total amount of loan distributed in these borrowers is 87 million dollar where Khushhali Bank was on the top with 168,105 active borrowers with 23.54 million dollars(Qayyum, 2003). The sources of Pakistani Microfinance Institutions are Share capital, grants, loan and savings. (Qayyum, 2003). But just after five years at the end of 2008s the distributed loan was 144.5 million among the 931,487 borrowers. Where Kashf Foundation was on the top with

Development Finance Essay

5941 words - 24 pages act as collateral behind a loan”, by Beatriz Armendáriz de Aghion and Christian Gollier (2000). “Microfinance programs promote investment in human capital (such as schooling) and raise awareness of reproductive health issues (such as use of contraceptives) among poor families, it also helps women acquire assets of their own and exercise power in household decision making and also improve livings”, by Shahidur R. Khandker (2005). “To make

Contigency Planning

2050 words - 9 pages a small Microfinance company that is based in New York City with its Headquarters in Manhattan and a subsidiary branch in Queens. This company is known as Seinfeld Microfinance specializes in supporting the set up and growth of small businesses and innovators. The headquarters has Fifty employees broken down in the following way; five in top management, ten in finance department; five in Human Resource management. The headquarters has five IT

Carrot Chip

846 words - 4 pages BSP Technical assistance to BSP for securities market development Capital markets, corporate governance, and nonbank financial institutions, Support through technical assistance for policy, advisory, and capacity building of key sector institutions 2 Sectors and Themes ADB Development Partner Project Name Capital Market Development Program Nonbank Financial Governance Program Second Nonbank Financial Governance Program Peso Swap and

Microcredit Analysis

1534 words - 7 pages one hand, microfinance is still promising as one of the strategies of development. Women’s empowerment through microfinance might lead to gender equality through enhanced self-confidence, resources, coping abilities, freedom of choice and power-relations. It also contributes substantially to the well-being of women, reduces women’s vulnerability and poverty, and provides stable and continuous income for family. In this context, microfinance can be

Wid, Gad and Wad

4528 words - 19 pages aims to spur development through investing more efficiently in women and girls. It stresses that the gap between men and women in human capital, economic opportunities, and voice/agency is a chief obstacle in achieving more efficient development. As an approach, it is a direct descendant of the efficiency approach taken by WID which “rationalizes ‘investing’ in women and girls for more effective development outcomes.”[42][43] As articulated in


2018 words - 9 pages of the behavior of the individual firms or markets. through the analysis of major economic factors that show predictable patterns and trends, and of their influence on one another. Introduction to Grameenphone Grameenphone, widely known as GP, is the leading telecommunications service provider in Bangladesh. With more than 37.7 million subscribers (as of April 2012), Grameenphone is the largest cellular operator in the country. It is a joint

Murabaha in Mauritius

870 words - 4 pages have been a big task to build a sustainable Islamic retail banking model that is profitable to service just over 200,000 Muslims in the Indian Ocean Island if it were not for the Bank of Mauritius’s plans to introduce short term liquidity instruments. Governor of the Central Bank said that it is a major step in translating the vision of the Authorities to provide an alternative mode of financial intermediation, thus enhancing the options available

Performance Enhancing Drugs in Sports - Paper

881 words - 4 pages rise. Never have athletes had more training aids at their disposal. The down side is that never before have athletes had more opportunities to cheat mainly through the use of performance enhancing drugs. Performance enhancing drugs should continue to banned throughout the sports world. There are many different types of performance enhancing drugs seen to be in use in sports. This includes Steroids, Amphetamines, Stimulants, Peptide Hormones


5863 words - 24 pages directly by lending, or indirectly by investing through the capital markets. Within the global financial markets, these institutions connect market participants with capital deficits (borrowers) to market participants with capital surpluses (investors and lenders) by transferring funds from those parties who have surplus funds to invest (financial assets) to those parties who borrow funds to invest in real assets. 1.3 Banking in Nepal

Strategies of Dcb Bank

2439 words - 10 pages ) and Tier II (INR 650 mn) capital in FY10 to support growth in advances Business Strategy: * Grow Retail, micro SME, SME, mid- Corporate and Agri / Microfinance with a “customer centric approach”. Concentrate on secured lending & diversified portfolio * Treasury – Liquidity management, opportunity for gains within acceptable risks * Relentless focus on Costs / Income Ratio and Service * Stringent mechanism for managing

Related Papers

Developing Human Capital Through Education: Challenges And Solutions

2082 words - 9 pages Developing human capital through education: Challenges and Solutions As India moves towards being a world economic power, despite the economic slowdown, the low standards of education raise a legitimate concern about the means through which India will manage to sustain this growth without developing its human capital. With its 357 million illiterates[1], India is home of a third of the total number of illiterates in the world. This is a

Microfinance Essay

3455 words - 14 pages stakeholder and in Ghana, the government is no exception. The government of Ghana undertakes microfinance through bodies such as Ministry of Finance and Economic Planning and Bank of Ghana (Central Bank). Supporting institutions also form part of the key stakeholders in microfinance. These bodies help or assist other stakeholders to undertake microfinancing activities. Examples of supporting institutions are Microfinance and small loans sector

Why Microfinance Institutions Are Not Sustainable

1537 words - 7 pages has enjoyed but not diminished (Pg, 1).” Sustainability could be also be defined as an ability or capacity of something to be maintained or to sustain itself. It’s about taking what we need to live now, without jeopardising the potential for people in the future to meet their needs. Microfinance According to Johnson (2007), Microfinance encompasses “the provision of financial services and the management of small amounts of money through a

Pros And Cons Of Microfinance Essay

2428 words - 10 pages most scalable and sustainable way of helping the Indian government meet its stated policy of encouraging “financial inclusion” for the 450 million people in India who are currently “unbanked”, i.e., with no access to basic finance” (Microfinance In India). The people that these loans are intended for are usually very poor and they only have enough capital for minimalistic survival, and therefore they do not have the credit in order to get loans