...MP A R Munich Personal RePEc Archive Attracting Microfinance Investment Funds: Promoting Microfinance Growth through Increased Investments in Kenya Jeffrey Ben Matu Duke University, International Development Program 18. April 2008 Online at http://mpra.ub.uni-muenchen.de/12084/ MPRA Paper No. 12084, posted 12. December 2008 17:42 UTC Attracting Microfinance Investment Funds: Promoting Microfinance Growth Through Increased Investments in Kenya Master’s Project Master of Arts in International Development Policy Terry Sanford Institute of Public Policy Duke University Jeffrey Ben Matu Principal Policy Advisor Dr. Graham Glenday April 18, 2008 Acknowledgements This paper could not have been written without Dr. Graham Glenday who not only served as my policy advisor, but also encouraged and challenged me to do my best. I would also like to thank my other committee members; Dr. Cory Krupp and Dr. Rosemary Fernholz for patiently guiding me through the writing process and for their suggestions and continued support. To my family and friends, I thank you for your encouragement with reading and commenting on the paper. And to my wife Sharon, for believing in me and encouraging me to never accept less than my best efforts. Finally I would like to thank Jennefer Sebstad, Leila Webster, Stefan Staschen, and Jerry Grossman for reading and making comments on my drafts. Thank you all. 2 Table of Contents List of Acronyms…………………………….…………………………………………….……………………...
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...article “Microfinance and the Illusion of Development” by Bateman and Chang argue about how microfinance most often makes things worse. Microfinance is about small loan, microloan, which is used by poor people to support income for activities in daily life. The contemporary model of microfinance first experimented in Bangladesh by Dr. Muhammad Yunus. The assumption appeal of microfinance is to help poor people exit from their poverty life, establish a sustainable economic and social development trajectory. However, Bateman and Chang reject this view of microfinance. They said that microfinance creates a powerful institutional and political barrier to sustainable economic and social development, and also poverty reduction. There are six ways that microfinance model is such an adverse impact on both the local community level and national economy level. First, they argue that microfinance model ignores the crucial role of scale economies. Microfinance produces microenterprises which enterprises and agricultural units that are very small and always operate below minimum efficient scale. All enterprise sectors operate below the minimum level makes it impossible for any enterprise to survive and prosper in a competitive business environment. Africa has the highest number of micro-entrepreneurs per capita in the world, and the supply of microfinance is increasing rapidly year by year. However, Africa still remains stay in poverty precisely because the increasingly microfinance-dominant...
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...Amanda Roy Talks about mostly the beneficial effects that microfinance can establish but also takes in the fact that there is much corruption that can be provoked through micro finance. This is a system used to establish a marketplace involving the worlds poorest billions people as a way to hope to jumpstart economic growth while also eliminating loan sharks and “microsharks” as Anand describes in her book. “Microfinance is essential to this new entrepunerial self made Africa” Bono uses Vanity Fair issue to get much more attention for microfinance “The strategy that may save financial capital, will make new market) 15:30 Hezbollah Largest financial instituition in for microfinance Egypt Came to terms with wasington consesuss on poverty Egpyt is reliant of US: Fight “pollution of free Money” but still take much free money Egyptian social fund Enzar gull- lost both legs, left arm, and 2 fingers in 1996 Repaid loan in 4 months not 6 as gardener and produces plants successfully Afghanistan-uses microfinance as tool of social reconstruction (MISFA) (tries to reduce credit which would ruin economy in Afghanistan. Broken Country: run over by development NGO’s turned cabo into goldrush Felicia marks intersection of vectors too. Marks intersection of vectors (capital & development) and indicated militarization of both capital and development. Shadows of eachother. Third image: finding and saving of afghan woman as imperial of campaigns in Afghanistan ...
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...Global Social Finance Research 02 May 2012 Volume Growth and Valuation Contraction Global Microfinance Equity Valuation Survey 2012 J.P. Morgan Global Research J.P. Morgan Social Finance Yasemin Saltuk Yasemin Saltuk AC (44-20) 7742-6426 (44-20) 7742-6426 yasemin.x.saltuk@jpmorgan.com yasemin.x.saltuk@jpmorgan.com J.P. Morgan Securities Ltd. J.P. Morgan Equity Research Frederic de Mariz (55-11) 4950-3398 frederic.de.mariz@jpmorgan.com Banco J.P. Morgan S.A. CGAP Jasmina Glisovic Henry González This report is the result of a collaborative effort between CGAP and J.P. Morgan. J.P. Morgan analysts are solely responsible for the investment opinions and recommendations, if any, in this report. See page 21 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that See page 21 for important disclosures. the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com Global Microfinance Equity Valuation Survey 2012 Global Social Finance Research 02 May 2012 Background & Acknowledgements Equity capital flows into microfinance have been increasing for many years, with both retail and institutional investors showing interest in this sector of financial services. Despite this growth...
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...Microfinance From Wikipedia, the free encyclopedia Jump to: navigation, search This article may be too technical for most readers to understand. Please help improve this article to make it understandable to non-experts, without removing the technical details. The talk page may contain suggestions. (January 2010) Community-based savings bank in Cambodia. There are a rich variety of financial institutions which serve the poor. Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services. More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."[1] Those who promote microfinance generally believe that such access will help poor people out of poverty. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Although microcredit is one of the aspects of microfinance, conflation of the two terms is endemic in public discourse. Critics often attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few...
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...West Africa: A Path for Reform and Action By Ibrahima Thiam Master, Russian Friendship University (1990) Submitted to the MIT Sloan School of Management in Partial Fulfillment of Requirements for the Degree of MASTER IN BUSINESS ADMINISTRATION At the MASSACHUSSETTS INSTITUTE OF TECHNOLOGY June 2007 C 2007 Ibrahima Thiam. All rights reserved The author herby grants to MIT permission to reproduce and to distribute paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. r Signature of author: V l/1 - / -MIT SanS/hool of Management ~ / May 11, 2007 Certified by: Alex (Sandy) Pentland Thesis Supervisor Toshiba Professor of Media Arts and Sciences Accepted by: by: Accepted MASSACiU'E) iS INSTF- I _ Stephen J. Sacca Director Sloan Fellows Program in Innovation and Global Leadership OF TECHNOLOGY JUL 0 2 2007 LIBRARIES l •ei zGwxS UNLOCKING THE POTENTIAL OF SMALL AND MEDIUM SIZED ETERPRISES IN WEST AFRICA: A PATH FOR REFORM AND ACTION By Ibrahima Thiam Submitted to the MIT Sloan School of Management on May 11, 2007 In Partial Fulfillment of the Requirements for the Degree of Master in Business Administration ABSTRACT Small and medium sized enterprises (SMEs) have proven their dynamism in West Africa. They are perceived by policy makers as an important reservoir for growth. The African Development Bank considers they represent over 90 % of business and provide about 50% of GDP and employment in Africa. Despite...
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...Other steps like as a consortium of 33 Public and private development agencies and establishment of Microfinance Management Institute (MAFMI) in 2003 are some of the significant landmarks in developing this sector. The entire microfinance industry is supported by CGAP which acts as a resource center for incubating and supporting new ideas, innovative products, cutting-edge technology, novel mechanisms for delivering financial services. It was looked at as concrete solutions to the ever rising challenges of expanding microfinance”. These were also responsible for Open Society and explore Institute for technical and managerial skills with a view to meet the requirements of microfinance sector. Thus CGAP has played a vital role in shaping the dominant theoretical orientation of microfinance. The diverse sphere of CGAP activities is guided by the philosophy to also champion the cause of commercial microfinance.by way of dissemination of microfinance best practice, grant-making to Micro Other Regional multilateral development banks like Asian Development Bank The Economic and Social Council of the United Nations declared the year 2005 as the International year of Microcredit, a global cell for the financial and building sector to “fuel” the strong entrepreneurial spirit...
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...(Kiva),!the!world’s!first!person"to"person!micro"lending!website! had!seen!incredible!growth!over!the!past!year.!!Media!exposure!such!as!an!appearance! on!the!Oprah!Winfrey!Show!and!a!mention!in!Bill!Clinton’s!book,!Giving,!resulted!in!an! enormous!number!of!lenders!coming!to!the!Kiva!website!in!hopes!of!lending!money!to! entrepreneurs!in!the!developing!world.!!! ! In!2005,!Kiva!introduced!microfinance!to!the!internet,!and!since!then,!has!created!a! global!community!of!people!connected!through!lending.!!By!partnering!with! microfinance!institutions!in!over!30!countries,!Kiva!has!given!small!businesses!in! developing!countries!the!opportunity!to!grow!and!thrive.!!The!company’s!microfinance! partners!post!profiles!of!loan!applicants!on!the!website,!where!anyone!with!a!credit! card!and!an!internet!connection!in!United!States,!Canada,!Europe!and!beyond,!can! provide!small!loans!to!the!businesses!of!their!choice!(See!Exhibit!1!for!a!sample!profile).! ! As!of!that!November!morning,!Kiva!lenders!have!funded!over!$14.5!million!to!over! 22,000!entrepreneurs!through!65!microfinance!partners!in!37!countries.!!The!team!was! meeting!to!discuss!the!upcoming!board!meeting!and!the!strategy!for!Kiva!in!the!coming! year.!!Though!the!meeting!was!filled!with!satisfaction!and!pride!in!what!the!team!had! accomplished!since!their!inception,!major!decision!needed!to!be!made!and!debates!...
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...Master Thesis Entrepreneurship and Microfinance: A Framework for Impact Evaluation Abstract The idea and implementation of Microfinance has become a hot topic and is currently at the central stage in debates on poverty alleviation. Microfinance can be defined as the sustainable delivery of financial services to the poor that aims at creating a world in which as many poor households as possible, have access to a suitable range of financial services (Christen, Rosenberg and Jayadeva, 2004). However, the large majority of impact studies of microfinance lack empirical support and several limitations and obstacles continue to haunt the potential outcomes of microfinance, such as selection bias (Tedeschi, 2007) and lack of integration with the commercial banking sector (Copestake, 2007). In my thesis, I will focus on yet another limitation, that of lack of entrepreneurial knowledge amongst lenders in microcredit. I will develop on the marginal impact of entrepreneurial training on microcredit and suggest an empirical framework. The paper will start by presenting the topics of entrepreneurship and microfinance and the current situation in Tanzania. In Part II a review of an important study by Karlan and Valdivia will be discussed and in the following section a suggestion for a framework for an empirical study will be made. Conclusions and limitations will be presented in the final sections. Student: Eva Teekens ID: 5704871 Study: Master Business Studies Specialization: Entrepreneurship ...
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...Assessing the Effectiveness of Microfinance Loans from NBC in Reduction of Poverty in Kinondoni District – Dar es Salaam. LIST OF ABBREVIATIONS. ACB - Akiba Commercial Bank CGAP - Consultative Group to Assist the poor CRDB - Cooperative and Development Bank FFI - Formal Financial Institution FINCA - Foundation for International Community Assiatance GDP - Gross Domestic Product NBC - National Bank of Commerce NGO - Non Governmental Organisation NMB - National Microfinance Bank NMFP - National Microfinance policy PFSs - Private Financial Sectors PRIDE - Promotion of Rural Initiatives and Development Enterprise SACCOS - Saving and Credit Cooperative Society SPSS - Statistical Package for Social Science URT - United Republic of Tanzania ABSTRACT The Ojective of the research was to assess the eeffectiveness/contribution of PFSs in reduction of poverty in Kinondoni District Dar es Salaam Tanzania. The research was conducted at NBC branches. The Branches to which the Reseacrh was conducted were Kinondoni Branch, Ubungo Branch, Mlimani City Branch, UDSM Branch and Tegeta Branche. Data were collected through interview and research questionnaires and were analyzed by using quantitative approach. The research study revealed that Tanzania...
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...org/wiki/Microfinance Microfinance [hide]This article has multiple issues. Please help improve it or discuss these issues on the talk page. This article may be too technical for most readers to understand. (January 2010) Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are: (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group. In some regions, for example Southern Africa , microfinance is used to describe the supply of financial services to low-income employees, which is closer to the retail finance model prevalent in mainstream banking. Community-based savings bank in Cambodia. There are a rich variety of financial institutions which serve micro-entrepreneurs and small businesses. For some, microfinance is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."[1] Many of those who promote microfinance generally believe that such access will help poor people out of poverty, including participants in the Microcredit Summit Campaign. For others, microfinance is a way...
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...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 property risks, and sustain the business development. How the micro insurance works is revealed in the path to restoration after severe storm hitting Haiti in June 2011. Fonkoze, the largest MFI in Haiti, collaborated with the Microinsurance Catastrophe Risk Organization (MiCRO) to provide natural disaster insurance coverage to its clients after heavy rainfall which caused damage in Haiti. The insurance helped the borrowers to pay back the outstanding debt, have access to another loan to rebuild their lives, and receive small compensation for loss of property. This example demonstrates the positive influence on viability of micro finance products to support a sustainable economic growth in developing countries. According to the 2009 MFI benchmarks provided by Microfinance Information Exchange (MIX)1, Latin American and the Caribbean (LAC) region has the largest FMIs number as well as yield on gross portfolio among four continents. (Figure 1) Even though microfinance has its long history, which can be traced back to the 1970s, and the...
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...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 and economically. Along with poverty, many other social problems or issues can be pointed out including unemployment, lack of education, lack of proper governance and over population. These problems are associated with poverty and most of the time regarded as causes or effects. In government’s bid to eradicate poverty from the rural areas, it adopted strategies and one of such strategies is microfinance. Microfinance involves the application of innovative methodologies that make financial services available to relatively poor households and microenterprises. Microfinance can also be termed as the practice of providing financial services including micro credit, micro savings and micro insurance to poverty stricken or poor individuals, such that they are assisted to collect large sums of money...
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...Freedom (2009), and the recipient of 26 honorary doctorate degrees and more than sixty other special awards. There is little to no doubt that the man is accomplished, hailed as the father of microcredit and a pioneer of microfinance. However, his success lies in something seemingly marginal and that much more brilliant, which distinguishes him as an intellectual and a thinker worthy of a place on the thinkers.com top 50 list. The idea of microcredit was first brought to light by Dr. Akhtar Hameed Khan (founder of the Pakistan (now Bangladesh) Academy for Rural Development). Yunus, a follower of Dr. Khan’s work, sought to implement the concept as a unique social business model aiming to eradicate poverty, starting with Bangladesh. With banks refusing to provide loans to ‘high-risk’ markets, Yunus felt that the poor were left at a disadvantage, unable to escape the grip of poverty. “To Muhammad Yunus, micro-credit must be seen as an action for the promotion of the entrepreneurial capacity of disadvantaged families, elimination of informal markets, creation of income and well-being for citizens.” (Microfinance Africa) As such, he set out to establish the Grameen Bank. The Grameen Bank seeks to improve the lives of the poor by providing access to microfinance and technology. The foundation...
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...Microfinance has its roots back in the 1970s. Mohammed Yunus has shaped this industry more than any other Microfinance pioneer. While working at the Chittagong University, Dr. Yunus has lent some money to poor women in the village of Jobra in Bangladesh, as an experiment. He was convinced that: “[…] the poor are like Bonsai trees. When you plant the best seed of the tallest tree in a six-inch deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil-base you provided was inadequate. Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on”. (Yunus, M., 2007) Inspired by this experiment he developed “a...
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