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Innovative microcredit solutions to fight poverty
Microfinance and economic development a level economics
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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 collateral. The performance of these institutions is very attractive even some commercial banks also started micro financing on commercial basis.
Actually it is not possible for poor or low income people to gain credit from formal banking sector. Because they have no collateral and no security which is the basic requirement of formal banking. That is why in most countries poor people have no access financial services due to which these people cannot build up their income and assets and cannot come out from poverty cycle.
There are some informal financial alternate like moneylenders, family loans and traders are usually restricted to a limited amount, mostly inflexible. It is necessary to help the poor and provide them sustainable economic opportunities at gross root level.
MFIs provide credit facilities to poor people to start new business, improve micro or small business, house improvement loan, Employees loan, Livestock loan Agriculture loan to individuals and groups without any collateral. The amount of this loan in Pakistan is Rs 1,500/- to Rs 150,000/- equilent to 18$ to1800$. The terms and conditions are usually so common and easily available to everyone. e.g. Holding of NIC(National Identity Card), two years stay of individuals at their NIC address, age 18 to 58 years, crass ...
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...revenues. (Sagheer, 2005).
Abnon Haq assessed the financial performance of Pakistani micro finance organizations in 2008 using the statistics of top 5 banks, 6 micro finance institutions and 4 NGOs and RSPs. He concluded that the growth rate of Micro finance banks is good, and the NGOs and RSPs are satisfactory. However the Pakistani MFIs should concentrate both individual and groups lending moreover these organizations should also concentrate on saving deposits which may be a source of funds for these organizations. (Haq, 2008)
The reasons of the unexplored features of Microfinance especially in Pakistan is the limited number of academic studies, lack of comprehensive datasets and governess techniques (Hartarska, 2005). To explore this field we must investigate this field with maximum data more variables and several governess aspects and characteristics.
Although poverty has minimized, it is still significant poverty which is characterized by a numerous amount of things. There are two types of poverty case and insular. “Case poverty is the farm family with the junk-filled yard and the dirty children playing in the bare dirt” (Galbraith 236)Case poverty is not irretraceable and usually caused if someone in the household experiences “ mental deficiency, bad health, inability to adapt to the discipline of industrial life, uncontrollable procreation, alcohol, some educational handicap unrelated to community shortcomings” (Galbraith 236).Case poverty is often blamed on the people for their shortcomings but on some levels can be to pinpoint one person's shortcomings that caused this poverty. Most modern poverty is insular and is caused by things people in this community cannot control. “The most important characteristic of insular poverty is forces, common to all members of the community, that restrain or prevent participation in economic life and increase rates of return.
Poverty has been looked at from two different prospective. You can be in poverty based on either a lack of ambition, or certain circumstances that may have taken place in your life. Anna Quindlen author of Homeless and Lars Eighner author of On Dumpster Diving are both located on the circumstance side of the spectrum. To be on the circumstance side of the spectrum you may have encountered a tragic event in your lifetime, for example the loss of a job. To be placed on the lack of ambition side of the spectrum, you have all the tools to be successful; however, you may be procrastinating or you just don’t care enough. I believe that the people who are in poverty are there because of certain circumstances. Poverty affects many people on a daily basis and Anna Quindlen and lars Eighner bring to light some of poverties harsh
Those who struggle with poverty know that there are few opportunities for change and ways to get money. With a growing poverty threshold resulting in massive amounts of poor people living in inadequate living conditions, it makes it hard to obtain the essential life necessities. Many factors lead to this steadily growing tragedy. Many of those who live in poverty have few resources necessary for them to acquire money, resulting in the decision to get cash through payday loans, or quick cash. Despite the amount of money Payday Loan Companies lend to lower classes, they actually cause more harm to those who receive assistance than it actually helps them. ...
Women all over the world suffer from poverty and unfair treatment. Almost half of these women in poverty come from Africa, being paid barely a dollar a day. These women can barely feed themselves let alone their family. In order to feed and take care of their family they need micro-loans to either start a business and continue their business. Women are not empowered by micro-loans because of gender-based division of labor, their husbands and men in their family, and the women being shamed for not being able to repay the loan and be in debt.
Monetary and fiscal policy and their applications to the third world countries with a huge informal sector
Microfinance organizations are helping women in developing countries. Women in developing countries are receiving income based on their husbands job without
Poverty is a serious phenomenon that has been widespread all over the world. Although, many charitable organizations like CARE, Action Against Hunger (AAH) or Emergency Nutrition Network (ENN) have operated with a highest enthusiasm to help the indigent, the amount of those have still been increasing significantly in recent years. According to the survey of the United States Census Bureau, the percentage of Americans in poverty rose from 12.2 to 15.9 percent and the proportion skyrocketed from 33.3 million to 48.8 million between 2000 and 2012 (Bishaw, 2013). The indigent are very poor people, including the disabled, beggars, homeless people who live in slums with lacking of insurance, being unemployed and earning underpaid salaries, about 1.25$ a day (Shah, 2011). Many of them are innocent people who face with mishaps that they cannot control. Consequently, they not only affect the society but also impact on development of the young generation. Therefore, the government should be responsible for take care of the indigent as well as supporting them to enhance the standard of living of citizens and maintain the stability of the society.
Figure 2 comes from Kiva, the San Francisco-based microfinance institution, and is not a common image when analyzing the vast amount of material on and the practice of microcredit and microfinance, which almost exclusively focuses on women. As of May 2008, microcredit’s most popular form, the Grameen Bank has 1.5 million borrowers, 97% of which are female (Ahmed 2008:128). Harper suggests that the case for women relies on the fact that women tend to have less access to anything, and find it hard to resist the pressures of repayment are more likely to accept routine standardized conditions of borrowing and repayment, and are considered more predictable in terms of customer behaviour (Harper 2011:55). Perhaps this illustrates a far too simplistic view on gender patterns of microfinance, but it does not speak to the barriers that men have in attempting to gain access to MFIs, which are geared predominately towards women. The borrower is a Yemeni man in his late 20s that is asking for a loan to purchase construction materials to renovate his family home. The loan activity itself is arguably not an economic venture, but it is important nonetheless. Kiva attempts to do micro-lending a little bit differently, by allowing borrowers access to capital for a multitude of reasons and then categorizing the activities based on subject matter such as Adnan, Figure 2’s subject. Kiva also strongly emphasizes ‘the human connection factor,’ being able to see and get to know borrowers through personable profiles. Nonetheless, Kiva appears to generally operate as any other MFIs, with extensive coverage on the location and conditions of the borrower and rate of return. Now, because Adnan’s loan activity is not inherently economic, questions on repaymen...
Many women in developing countries are not educated therefore they may not know how to successfully triumph with micro-loans. Although this does not apply to all women, there are still women that will not make good decisions with their loans. As a whole women are not prospering into bigger and better things, they are digging themselves a big hole financially that will become severely hard and painful to obtain equilibrium. Of
The lifestyle of people across the world is developing rapidly. As there is a growing concern for people about the lifestyle and way of living, the scope for the microfinance industry is also at a growing pace. A large number of people across the world prefer finance for the purpose of purchase of consumer durables as well as lifestyle products. As the credit card EMI options are more expensive, people prefer NBFCs for the purpose of consumer durable loans. The project done in bajaj finserv explains the role of NBFCs in the consumer durable loans and the procedure undertaken in order to disburse the consumer durable loans.
...Taxing the rich more and the poor less, taxing methods need to be tailored to an individual’s financial bracket to ensure that upward social mobility becomes an absolute possibility. Building self-sufficient economies, projects to launch new industries and businesses will also need encouragement from the people. Education, it provides training to tomorrow’s workforce and helps the economy against the increase of poverty. Involvement of the media, the media has a lot of power when it comes down to grabbing society attention. With the media, people will become conscious of one of the major issues, poverty. Micro financing, offers financial services to individuals in developing nations who wish to run their own businesses. All these ideas should be implemented. It may seem unrealistic to try all 10 of them but giving some solutions a try would help the cycle of poverty
Overall, microcredit has helped millions of people around the world and it continues to have a great impact on poor people, informing them that all they need is a little ‘push’ or start-up money to begin creating a better life and subsequently a better community. Each organization has its own goals and purposes depending on the country where they reside as well as different challenges that have appeared. Microcredit is helping poor people and small business owners to better themselves as well as to their families and have their time, skills, and ideas utilized in an effective and positive way.
As there are many types of banking and financial institutions in Cambodia, the scope and limitation of the study is mainly take only the commercial banks and microfinances to examine. The study will only go through the basic background of the banking industry and the basic issues and solutions which excludes the other related cases involved in politics.
Altaf Hussain Sumo “Small Business in Pakistan: Characteristics, Problems and Sources of Finance”. Downloaded from http://sbaer.uca.edu/research/icsb/2009../paper141.pdf
There are two ways to categorize poverty from a sociologist viewpoint. Absolute poverty simply refers to the condition in which one is unable to afford the necessities of life, whereas relative poverty refers to the condition in which one is unable to afford that which is considered a normal standard of living in society. Absolute poverty is far more worse than relative poverty because they could quite possible not have a house or food to live on for everyday survival. There are basically five different categories in which each poverty stricken person can be placed in. The first category are those who are not able to work because they are too old, too young, disabled, or tied down by social responsibility. The second category are those who are able and qualified to work but can not find work. The third category are those who are not equipped to fill available jobs either because they are undereducated or because their skills have become outdated. The fourth category are those whose social and personal problems have brought them to a point of self-defeating discouragement. The last category are those who are underpaid, or unable to get a fair price for what they have to sell. After defining which people are in poverty, these categories can answer my question of why are they in poverty and how they can be helped.