1 / 15

Microfinancing

Microfinancing. Presented by: Myasnik Poghosyan Ramiel Betnisan Kari Roth. Introduction. Existence of extreme poverty Fight against global poverty Lack of traditional financing Help poor to help themselves A profound effect of microfinance. Defining Microfinance .

JasminFlorian
Download Presentation

Microfinancing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Microfinancing Presented by: Myasnik Poghosyan Ramiel Betnisan Kari Roth

  2. Introduction • Existence of extreme poverty • Fight against global poverty • Lack of traditional financing • Help poor to help themselves • A profound effect of microfinance

  3. Defining Microfinance • What is Microfinance ? • Microfinance is a proven “micro” financial solution that helps poor people to help themselves. • Provision of several financial services such as microcredit, microsavings, and microinsurance

  4. Origins of Microfinance • 1864-Friedrich Wilhelm Raiffeisen • Village-bank movement in Germany • Reached 2 million farmers by 1901 • 1900-Alphonse Desjardins • “Caisse Populaire” movement Quebec • Member-owned financial co-operative • 1970’s- A new wave of microfinance • An early pioneer Akhtar Hameed Khan • Revolutionary idea of “microcredit”

  5. The Key Role of MFIs • Reaching out to the very poor • Delivering microfinance services • Educating local communities • Collecting weekly loan payments • Providing additional social services

  6. Models of MFIs • The Grameen Bank model • Focus on women • Borrower group • Five members guarantee each other • The Village Bank model • Latin America and Africa • External accounts and internal accounts • Credit Unions • Self-help Group

  7. Grameen Bank • Community Development Bank • Makes small loans without requiring collateral • Accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies • Founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize in 2006.[1]

  8. Grameen Bank • Self-help group • Group of five individuals are loaned money, but the whole group is denied further credit if one person defaults • (97%) loan recipients are women • High payback rates—over 98 percent

  9. Grameen Bank • Of the total equity of the bank, the borrowers own 94%, and the remaining 6% is owned by the Government of Bangladesh • Total number of borrowers is 6.67 million, and 97% of those are women • The Bank has 2,247 branches (as of May, 2006) covering 72,096 villages, with a total staff of over 18,795 • Since inception, total loans distributed amounts to (US$ 5.72 billion) • Out of this, Tk 258.16 billion (US$ 5.07 billion) has been repaid.

  10. Rural Telephone Programme • Bangladesh has one of the lowest telephone densities of the world. • Grameen Phone, a sister company of the bank, is already the largest mobile telephone provider of the country • Grameen Telecom, another sister company of Grameen Bank, brought radio-telephones and mobile phones to almost half of the villages of Bangladesh. • Distributed loans to almost 139,000 poor women in rural areas to pay for the phones.

  11. Woman and Microfinancing • Economic development • Reduce birth rates • Improve health • Improve nutrition • Improve education • Types of Businesses • Weaving • Embroidery • Raising Livestock • Basket making • Growing fruits & Vegetables

  12. Advantages of Microfinancing • Easy to obtain • Do not need collateral • Offer development services • Used for any purpose provided it is business related • Microloans administrated on a local level, easier to develop a relationship with your lender • Opportunities

  13. Disadvantages of Microfinancing http://ies.fsv.cuni.cz/storage/sylab/148_w07_microinstitutions_eldc.pdf - Micro Institutions Lecture 7

  14. Challenges/Recommendations • Better accessibility • Provide more formal training • Tax incentives • Performance-based microfinancing

  15. Questions?

More Related