...Microfinance is usually understood to entail the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. 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 however is closer to the retail finance model prevalent in mainstream banking. 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. For others, microfinance is a way to promote economic development, employment and growth through the support of micro-entrepreneurs and small businesses. 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...
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...When Bangladesh came into existence on the 16th December, 1971, the banking sector of Bangladesh was in a total disarray. With the exception of two local banks incorporated in then East Pakistan, all the bigger local banks became in operational. Starting with such a humble condition, the Banking Sector of Bangladesh has grown to a great extent. The banking industry in Bangladesh has flourished over the years, making double-digit profit percentages, sustaining growth and surviving cut-throat competition while providing attractive returns to shareholders. The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are Nationalized Commercial Banks (NCBs), 28 local private commercial banks, 12 foreign banks and the rest five are Development Financial Institutions (DFIs). Sonali Bank is the largest among the NCBs while Pubali is leading in the private ones. Among the 12 foreign banks, Standard Chartered has become the largest in the country. The number of total branches of all scheduled banks is 6,038 as of June 2000. Of the branches, 39.95 per cent (2,412) are located in the urban areas and 60.05 per cent (3,626) in the rural areas. Of the branches NCBs hold 3,616, private commercial banks 1,214, foreign banks 31 and specialized banks 1,177. [pic] Janata Bank is a state-owned commercial bank of Bangladesh established in 1971. Its headquarter is situated at Motijheel in Dhaka, the capital city of Bangladesh. Immediately after the emergence of Bangladesh...
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...bank has played a key role in the expansion of business on the island. It has grown up to be today the third major bank in Mauritius, after the Mauritius Commercial Bank (MCB) and the State bank of Mauritius (SBM). The excellent reputation Barclays Mauritius has established since nearly ninety years is based on its substantial capital resources, high credit rating and group financial strength. Barclays in Mauritius operates as a branch of Barclays PLC (UK) and is present in both the domestic and international divisions of the financial sector. Barclays Mauritius provides a range of banking services to personal and corporate customers. Personal services include a range of current and savings accounts, foreign currency accounts, loans – including home loans and multi-purpose loans, credit cards, ATMs, and telephone banking. Business services include lending products, trade and export finance and many specialist services such as treasury, foreign exchange and capital markets capability. Barclays Mauritius is also present in the asset finance (leasing) business through the Barclays Leasing Company Ltd. 2.2 The...
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...offer small sum credit, bank accounts and savings accounts to housing association tenants and others who can otherwise only access loans at a very high cost from sources such as payday lenders, doorstep lenders and loan sharks. This first phase of the business was funded by the Department for Work and Pensions (DWP) housing associations and Wates Family Enterprise Trust. In addition a credit line was secured from the Royal Bank of Scotland. MHF is seeking further finance to consolidate grow its West Midlands operations and expand into other regions of England. 2) Features (Business model) The Federation wanted to establish whether housing associations could lead a major expansion in the provision of more affordable credit. As well as enabling many more people to be helped than are currently assisted by third sector lenders, the emphasis was to explore models of delivery that would be less reliant on large ongoing levels of public subsidy. MyHome Finance (MHF) can help fill the void for many (though by no means all) financially excluded customers by offering credit at a more affordable interest rate that is suitably priced for risk of default. It is envisaged that MHF will be a partnership between the housing association sector and a retail bank. Suitably located loan offices would be provided by participating housing associations. As housing providers do not have the infrastructure or expertise to effectively provide loans themselves, the partner bank would provide...
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... Some people decide to have their savings stored away in the privacy of their own homes, some may open an interest bearing savings account, and the other type of people start to make investments. According to Gitman, an investment is defined as simply any asset into which funds can be placed with the expectation that it will generate positive income and/ or preserve or increase its value. Investments can come in different forms and depending on whether you chose to invest in, being a company or a government entity, will determine the type of investments you will have access to. (2011). One of the types of investments are securities and they could be issued by firms, a government entity, or other organization. The most common of these are either stocks or bonds, also in some instances stock options are available as well. Property, another investment type, comes in the form of real property or personal tangible personal property like gold, artwork, antiques, and things of that nature. There is a type of an investment know as direct and indirect investments. How to differentiate between the two is direct investment is where the investor directly acquires a claim on a security or property, while with an indirect investment is when a collection of securities or properties are managed by professional investors. Debt, also known as a loan, obligates the borrower to make periodic interest payments in order to repay the full amount of the loan that was borrowed. If companies or...
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...HDFC BANK INTRODUCTION HDFC (Home Development Finance Corporation) Home Loan, India have been serving the people for around 3 decades and providing various housing loan according to their varied needs at attractive and reasonable interest rates. Owing to their wide network of financing, HDFC Home Loans provide services at doorstep and helps you find a home as per your requirements. COMPANY PROFILE HDFC Limited founded in 1997 by Ravi Maurya and Hansmukh bhai Parekh, is an Indian NBFS focusing on home loans. HDFC operates through almost 450 locations throughout the country with its corporate head quarters in Mumbai, India. HDFC also has an international office in Dubai, UAE with service associates in Kuwait. HDFC is the largest housing company in India for the last 27 years. HDFC was amongst the first to receive an in principal approval from RBI to set up a bank in the private sector, as a part of the RBI’s liberalization of the Indian banking industry. It was incorporated onincorporated on 30th august 1994 in the name of ‘HDFC Bank Limited’, with its registration office in Mumbai. HDFC began its operations as a scheduled commercial bank on 16 January 1995. HOME LOAN PRODUCTS • Home Loan: Home loans for individuals to purchase (fresh / resale) or construct houses. Application can be made individually or jointly. • Home Improvement Loan: The interiors of any home reflect the personal preferences and tastes of its owners making it...
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...Company Introduction Background of the Bank Passing of Indian co-operative Societies Act 1912 is an important land mark in the co-operative movement in the country. Because of this, a number of Co-operative Societies had been organized in the district by the people and question of financing them had to be tackled. As the result, Puttur Rural Credit Co-operative Society which was established in June 1912. But experience soon proved that its constitution and resources were inadequate for this task and the enthusiastic pioneers who were responsible for ushering it in to existence applied their minds to the formation of the district bank with the avowed purpose of financing Primary societies. For the purpose on 30th November 1913 the South Canara...
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...the livelihoods of many workers. The concurrent labor and social movements and the issues they attempted to address describe the climate at the time. The first co-operative may have been founded on March 14, 1761, in a barely-furnished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society. In the decades that followed, several co-operatives or co-operative societies formed including Lennoxtown Friendly Victualling Society, founded in 1812. The early attempts at forming co-operatives met with varying degrees of success, and it was not until 1844 when the Rochdale Society of Equitable Pioneers established the 'Rochdale Principles' on which they ran their co-operative, that the basis for development and growth of the modern co-operative movement was established. Robert Owen (1771–1858) is considered the father of the co-operative movement. A Welshman who made his fortune in the cotton trade, Owen believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the cotton mills of...
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...Difference Between Investment Banking and Merchant Banking Investment vs. Merchant Banking Bank is an organization that provides a range of financial and some non financial services to its customers. The main source of income, that makes the bank survive is the interest charged from those to whom the bank has given loan. A bank accepts deposits from its customers and pay interest to that deposited money, while it lends money to those who need finance and charge interest from them. The interest rate chargeable from the borrowers is higher than the interest rate payable to depositors. This is how a bank, which is traditionally known to normal people, earns revenue. Banks can be broadly categorized as retail banks and investment banks. The above mentioned revenue generating procedure is more applicable to a retail bank. The revenue models of investment and merchant banks are different, which we will discuss in this article. Investment Banking An investment bank is a financial institution that engages in the issuance of securities on behalf of its client. Investment banks are the banks, which facilitate both the investor, who is in search for good investment opportunity and the investee, who is searching for capital to invest in viable projects. Unlike other types of banks, investment banks are not accepting deposits from customers; that is, investment banks do not provide regular banking services to the general public. The main Investment banking activities are issuance...
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...Case study Bangladesh: Financial Linkages in Bangladesh Abdul Awal, Director, CDF Abstract: Microfinance in Bangladesh has almost reached the stage of a matured market. However, there are still substantial segments of potential clientele who are not serviced by any microfinance organization (MFI). Inadequate finance is one of the most important reasons MFIs have not reach these clients. Fund shortage is more prevalent among the smaller MFIs. Moreover, due to the scaling up of microenterprises of the existing clients, they are requiring larger loan amounts. On the other hand, though the formal financial organizations are burdened with significant amounts of excess liquidity, they are not in a position to directly provide services to microcredit clients - it is not viable. Even funding operations of smaller MFIs directly, are out of their reach. In such a situation, an effective linkage between the MFIs with financial constraint and banks with excess liquidity is a simple but highly effective solution. Introduction Poverty has always been on the development agenda in Bangladesh. In the history of this country, poverty has been rampant and presently Bangladesh is third in terms of number of poor following India and China. It is a densely populated country of only 150,000 square kilometers and a population of around 140 million. The country consists mainly of a flat delta plain. In addition to its very high population density, the country has a limited natural resource base and is...
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...jewelry, gold, domestic animals, building materials or other things that easily can be exchanged for cash. To save money they might bury cash in the garden or stash it under the mattress. Some is participating in informal saving groups where a small amount of cash is contributed every day, week or month or asking neighbors to hold or pay local cash collectors to keep the money safe. But these informal savings is not a very dependable and a safe way to rely on. For example can it be difficult to get fast money if they suddenly needs a small amount of cash. In-kind savings is in the risk of fluctuations in commodity prices, destruction by insects, fire, thieves and illness. Informal rotating savings groups tend to be small and rotate limited amounts of money. This is why the formal financial institutions also play an important role for the poor people. * About Microfinance 1. What is microfinance? Microfinance is a provision of different basic financial services to individuals with low-income or who lack access to traditional formal banking services. These basic financial services is usually small loans and savings. The amount of money is small (micro) because the ability for poor people to handle and pay back larger loans is a risky business both for the lender as for the borrower. Especially since poor people often have the lack of knowledge and no assets to fall back on. 2. What is microcredit? Microcredit...
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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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...market, they naturally refer to the capital market such as stock trading, or the banking sector like personal savings or commercial lending. After all, this is the mainstream market, which is more visible to the outside world. There is a lesser known territory which already catches the attention of foreign investors over the past few years. It is the microfinance market. By definition, it is financial services for micro-entrepreneurs, small businesses, and individuals who lack access to traditional banking services. The Market In China, microfinance products range from consumer loans to commercial lending. Similar to other nations, this financial market segment has become a necessity rather than a choice. The growth of China’s microfinance market is also fueled by an imbalanced financial eco-system and the central government’s strict control of interest rates which resulted in banks deserting this market segment. Subsequently, new operators arose to provide financial aid for those in need. This includes microfinance (microcredit) and guarantee companies, P2P (person to person) lenders, as well as underground banks. Although there are banks in China that also provide microloans, they are still relatively small and not regarded as a mainstream service. Middle Kingdom’s Challenges in Borrowing It is not news that many enterprises and individuals struggle to secure loans from banks, especially those who lack collateral (e.g. properties, cars). Chinese banks in general prefer lending...
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...Country Risk Analysis: Philippines As trade barriers continue to fall and technological advances accelerate, the offshoring trend will continue as companies strive for operational efficiencies by outsourcing production and labor and taking advantage of capital markets. International business is not a new phenomenom, however the volume of international trade has increased dramatically over the last decade. Today, every nation and an increasing number of companies are investing abroad. Private and public investors must determine which countries offer the best prospects for sound investments. The decision to invest overseas begins with a determination of the riskiness of the investment climate in the country under consideration. In this paper we will evaluate the country risk analysis of investing in Philippines. The Philippines is the third-largest English speaking country in the world, enabling its manpower to have a unique edge over neighboring countries in terms of labor quality. Flanked by the Pacific Ocean and the South China Sea, its strategic location makes it a critical entry point to some 500 million people in the Association of Southeast Asian Nations (ASEAN) market, offering vast trade opportunities, and an ideal base for business. It is also the best Asian country in terms of overall quality of expatriate life, considering its cultural compatibility with expatriates, housing, sporting and recreational facilities, quality healthcare, and first-rate educational institutions...
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...A PROJECT REPORT ON STRATEGIC MANAGEMENT. SUBMITTED TO : NIILM-CMS SUBMITTED BY: SIDDHARTH ATMARAMANI PGDM (2010-2012) ROLL NO. 2010169 UNDER THE GUIDIANCE OF: MS.RITU SRIVASTAVA ANSWER 3 : OPERATIONAL EFFICIENCY OR STRATEGY For a company to be successful it is required for it to be flexible enough to adapt to the changing economic conditions. They must outbeat their own benchmarks continuously to achieve best practices. For example regarding axis bank : Profit after tax up 34.76% to `3,388.49 crores Net interest income up 31.14% to `6,562.99 crores Fee & other income up 32.39% to `4,135.16 crores Deposits up 33.93% to `189,237.80 crores Demand deposits up 17.78% to `77,767.40 crores Advances up 36.48% to `142,407.83 crores Retail assets up 33.32% to `27,759.23 crores Network of branches and extension counters increased from 983 to 1,390 Total number of atms went up from 4,293 to 6,270 Net npa ratio as a percentage of net customer assets down to 0.26% from 0.36% Earnings per share (basic) increased from `65.78 to `82.95 Proposed dividend up from 120% to 140% Capital adequacy ratio stood at 12.65% as against the minimum regulatory norm of 9% And also they must nurture a few core competencies to stay ahead of rivals. Eg. Rivals can quickly copy any market position and competitive advantage is at best temporary. For example, in the banking industry if any bank comes up with a new product or scheme or merges up with other or introduces cost cutting approaches...
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