This website uses cookies to ensure you have the best experience. Learn more

Microfinance Essay

3455 words - 14 pages

TERMS
* Rural Financial Services Project (Africa Development Bank, German Agency for Technical Cooperation, World Bank): refers to a project being undertaken by the above bodies to provide financial services to the rural dwellers to enhance development.

* Credit risk: This refers to the degree to which it is likely that a borrower or debtor may not repay a loan or debt. It also means a particular borrower or debtor perceived by a lender or creditor as being particularly not likely to repay a debt. (Microsoft Encarta 2007).
|
|

|
INTRODUCTION
Poverty is one of the problems faced by the people living in the rural areas and this largely affects their lifestyles both socially ...view middle of the document...

The economy of Ghana during the 1960’s was dominated by Agriculture (which constitutes 60%) and government in its efforts to finance this sector established the Agricultural Development Bank in 1965 to specifically address the financial needs of the fisheries and agricultural sector. This further led to the establishment of rural and community banks whose purpose was to lend to agriculture and small-scale industries in the 1970’s and early 1980’s. The first formal micro finance institution in Ghana arose out of the micro savings product of the Post Office System. The service was upgraded to Post Office Savings Bank under the Savings Bank Act 1962 (Act 129), to operate independently within the Post Office System. It attained full bank status as National Savings and Credit Bank in 1972 under NRC Decree 38. The new management abandoned the use of the network of the Post Office System and developed its own, leading to the destruction of the micro savings product.

STAKEHOLDERS
Just like any other project, microfinance has a structure and key stakeholders. The key stakeholders involved in microfinance are microfinance practitioners, end users, technical service providers, government and supporting institutions. Microfinance practitioners refer to bodies that practice or engage in microfinancing activities on a daily basis. Examples of such bodies are ARB Apex Bank, rural and community banks, some development and commercial banks and Association of financial NGO’s (non- governmental organisations). Another key stakeholder in micro financing is the end users. These are economically active poor who are clients of microfinance products and services. Examples are farmers, self employed and individuals involved in off-farm activities such as basketry. Another stakeholder involved in micro financing activities is the technical service providers. These are bodies that provide business development services to microfinance institutions and their clients. The Government of Ghana is also a key stakeholder in microfinance. In any country where microfinance is being practiced, the government in power is an automatic 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 (MASLOC), The Ghanaian Microfinance Institutions Network and Universities, training and research institutions. All financial institutions that engage in microfinance activities belong to a certain category. There are three categories in terms of classifying financial institutions that undertake microfinance in Ghana. The first group in which most financial institutions fall under is the formal financial...

Other Essays Like Microfinance

Why Microfinance Institutions Are Not Sustainable

1537 words - 7 pages Why are some Microfinance Institutions not sustainable Ghana Christian University College SDM 201222101014 Introduction to Microfinance Mr. Sam Quin Word Count: 1273 Nov. 11, 2014 Table of Content Pg Introduction 3 Definition of Terms 3 Sustainability of Microfinance Institutions 4 Why some Microfinance are

Micro Finance Essay

990 words - 4 pages There are several business models how Microfinance institution (MFI) operates. Generally speaking, MFI provides micro loans or insurance to the poor to spur their self-reliant entrepreneurs. On one hand, micro loans give the low-income people an opportunity to discover full potential for developing their own business and to bring home the bacon. On the other hand, micro insurance helps the poor manage variety risks, such as health risk and

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

Microcredit Analysis

1534 words - 7 pages qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor. Microcredit is a financial innovation that is generally considered to have originated with the Grameen Bank in Bangladesh.[1] In that country, it has successfully enabled extremely impoverished people to engage in self-employment projects that allow them to generate an income and

Carrot Chip

846 words - 4 pages Rural and microfinance Microfinance policy and support for community development and infrastructure ADB Rural Microenterprise Finance Project Microfinance Development Program DBP’s Credit for Better Health Care Project World Bank Third Rural Finance Project LBP’s Support for Strategic Local Development and Investment Project KFW DBP’s Credit Line for Solid Waste Management Program 2003 €15.00 million 1996 $150.00 million 2005 $150.00 million

Financial Innovation

1777 words - 8 pages Innovation like a debit card can lift millions of people out of poverty and connect them to the global economy. It helps entrepreneurs raise money for the next idea. In the coming few pages I shall attempt to discuss few financial innovation and how they have affected the global economy. Microfinance Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services

Mhs Case Study

826 words - 4 pages continued to receive money to continue to build these shelters and maintain their organization as well. As business grew and more and more shelters were needed, an increase in employees was needed as well, especially because a lot of this work was hands on labor. Moving Forward Things were starting to look good, until India's microfinance industry collapsed. MHS currently needs to reposition itself for continued operations and long-term growth

Development Finance

5941 words - 24 pages , for this purpose they are provided with development Finance from the DFIs, they can take from the commercial banks according to different introduced schemes and requirements for granting loan by the State Bank in order to facilitate entrepreneurs. In FY 2009-10, development expenditures are Rs. 616.5 billion, i.e. 21 percent of the total expenditures. LITRATURE REVIEW Many studies have been conducted on SMEs, NGOs, Microfinance, by many

Social Entrepreneurship

582 words - 3 pages initially making losses because the cost of production of the eyeglasses was greater than the selling price. Consequently, in order for VisionSpring to breakeven the business needs to sell millions of glasses. Therefore, VisionSpring needed partners who will be able to purchase glasses and join the organization in their missions. Partners such as FGX International, Microfinance and ClearVision are joining Kassalow to undertake their operations

Private Banking Institution

865 words - 4 pages  Citystate Savings Bank  Cordillera Savings and Loan Bank  Dumaguete City Development Bank List of rural banks Aklan • Rural Bank of Altavas • Rural Bank of Balete • Rural Bank of Banga (Aklan) • Rural Bank of Makato • Rural Bank of New Washington • Rural Bank of Malinao - Microsavers Bank Albay • Camalig Bank • Cagsawa Rural Bank • Ibalon Rural Bank • Rural Bank of Guinobatan Aurora • AuroraBank: A Microfinance-oriented Rural Bank

Murabaha in Mauritius

870 words - 4 pages for shariah compliant products based on the sharing of risks and rewards. Government has taken an array of measures to encourage the development and promotion of Islamic banking and financial services. Islamic insurance (takaful) and Islamic leasing (ijara) are being offered in Mauritius and microfinance is being offered by credit cooperative societies based on Islamic principles such as murabaha(deferred sale). Mauritius is also an active

Related Papers

Microfinance Essay

3192 words - 13 pages UKessays * Skip to content * United Kingdom * My Account * 0115 966 7955 ------------------------------------------------- Top of Form Bottom of Form * UK Essays * Services * Instant Price * Order Now * Essays * Dissertations * Guarantees * Contact * tourism The tourism essay below has been submitted to us by a student in order to help you with your studies. 1. UKEssays 2. Essays 3. Tourism 4

Pros And Cons Of Microfinance Essay

2428 words - 10 pages to end poverty” (Roy, 6). This newly founded mindfulness of poverty in the world has led to the need for actions, and in order to deal with poverty and under development the idea of microfinance has been created. India has experienced microfinance in both good and bad ways, and I want to use this idea of constructive and undesirable outcomes inside of microfinance in order to show how microfinance can be a saving grace or a mirage to some micro

Enhancing Human Capital Through Microfinance Essay

2140 words - 9 pages UIU | 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

Microfinance Institutions Performance In Pakistan Essay

2121 words - 9 pages Introduction Poverty is the main problem of everywhere. For the last thee decades several developing and developed countries taken several steps to alleviate the poverty. In the world %??(how much %) people are living life below the poverty line their daily or monthly income is less than $ xxx(how much) . One main step is the establishment of Microfinance Institutions which are providing micro credits to the poor people without any