Microcredit and Social Business Movement As Catalyst for Poverty Eradication: the Grameen Experience
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Social Entrepreneurship – Creating Value for the Society Dr
Prabadevi M. N., International Journal of Advance Research, Ideas and Innovations in Technology. ISSN: 2454-132X Impact factor: 4.295 (Volume3, Issue2) Available online at www.ijariit.com Social Entrepreneurship – Creating Value for the Society Dr. M. N. Prabadevi SRM University [email protected] Abstract: Social entrepreneurship is the use of the techniques by start-up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues. This concept may be applied to a variety of organizations with different sizes, aims, and beliefs. Social Entrepreneurship is the attempt to draw upon business techniques to find solutions to social problems. Conventional entrepreneurs typically measure performance in profit and return, but social entrepreneurs also take into account a positive return to society. Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals often associated with the voluntary sector. At times, profit also may be a consideration for certain companies or other social enterprises. Keywords: Social Entrepreneurship, Values, Society. 1. INTRODUCTION 1.1 Defining social entrepreneurship Social entrepreneurship refers to the practice of combining innovation, resourcefulness, and opportunity to address critical social and environmental challenges. Social entrepreneurs focus on transforming systems and practices that are the root causes of poverty, marginalization, environmental deterioration and accompanying the loss of human dignity. In so doing, they may set up for-profit or not-for-profit organizations, and in either case, their primary objective is to create sustainable systems change. The key concepts of social entrepreneurship are innovation, market orientation and systems change. 1.2 Who are Social Entrepreneurs? A social entrepreneur is a society’s change agent: pioneer of innovations that benefit humanity Social entrepreneurs are drivers of change. -
No. 31 Page One.Pmd
OECD DEVELOPMENT CENTRE www.oecd.org/dev/insights PolicPolicyy InsightsInsights No. 31 November 2006 Microfinance: How Bankers Could Buy Back Their Soul by Lucia Wegner, Economist, OECD Development Centre Muhammad Yunus was not awarded the Nobel Prize for Economics. He got the one for peace; and so it should be. Why is There a Need for Microfinance? He is not only being honoured for improving access to credit for the poor but for allowing millions of women in Bangladesh Only a fraction of the 4 billion people – households and in poor villages beyond to see a future for themselves. and micro-entrepreneurs – living on less than $1 500 With loans of just a few dollars, poor women could become a year, the so-called “bottom of the pyramid”, have entrepreneurs, send their children to school, improve access to basic financial services. Microfinance has health care for their families and protect themselves better proven very successful in expanding these people’s from sickness, death, and natural disasters. Ultimately, access to credit. Microfinance Institutions (MFIs) include they could pull themselves out of poverty. a broad range ofIn financial a continent sector of organisations stranded mobility such as In order for microfinance institutions to reach more poor banks, non-bank financial institutions, financial co- people they should become an integral part of the financial operatives and credit unions, finance companies and sector, and develop as sound domestic intermediaries. They NGOs specialising in serving people who lack access to should go commercial, broadening their client basis and traditional financial services. scaling up their loans to small enterprises. -
UNIT 11 MICRO CREDIT STRUCTURE 11. 1 Introduction
UNIT 11 MICRO CREDIT STRUCTURE 11. 1 Introduction 11.2 Objectives 11.3 Definition 11.4 Modern Micro credit 11.4.1 Early beginnings 11.4.2 Modern Micro credit 11.4.3 Grameen Credit 11.5 Economic principles of micro credit 11.5.1 Group lending 11.5.2 Self help group 11.5.3 Lending to women 11.6 Strategies of micro credit systems 11.7 Systems and methods of micro finance 11.7.1 Foreign investments in micro credit projects 11.7.2 Micro finance development fund 11.8 The developed world 11.8.1 Micro credit and the web 11.9 criticisms 11.10 Summing Up 11.11 Glossary 11.12 Answers to check your progress 11.13 References 11.14 Questions for reflection and practice 1 ______________________________________________________________________________ 11.1 INTRODUCTION This Unit starts with defining Micro credit and elaborately deals with early beginning of micro credit and modern micro credit system. To explain further, the Unit takes grameen bank model of micro credit as a case study. It also deals with economic principles of micro credit and self help movement. ______________________________________________________________________________ 11.2 OBJECTIVES After studying this Unit, you would be able to Define micro credit; Trace the early beginnings of micro credit; Discuss modern micro credit system with grameen bank as an example; Explain the economic principles of micro credit system; and Examine the micro credit and self help group movement in India. 11.3 DEFINITION Microcredit is a broad name for the programmes that extend small loans to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families. -
Dr. Akhter Hameed Khan – the Pioneer of Microcredit
Pakistan Perspectives Vol. 14, No. 1, January-June 2009 Notes Dr. Akhter Hameed Khan – The Pioneer of Microcredit Nasim Yousaf* It's hard to believe that microcredit – which has exploded into the world of finance in recent years – was considered an unfeasible concept at one time. Microcredit provides very small loans to those who have no verifiable credit history or collateral that would be acceptable to a financial institution. Prior to the microcredit methodology, banks served only the privileged and, as a result, perpetuated the gap between the poor and the rich. However, in the 1950s and ‘60s, Dr. Akhter Hameed Khan, a world-renowned social scientist from Pakistan, initiated the Comilla cooperative program, and proved to the world that it was indeed possible to provide credit to the poor - with great success no less. In order to gain a greater understanding of why Dr. Khan’s cooperative scheme was so successful, one needs to travel back to the 1950s – the early years of the Pakistani nation. Since its founding in 1947, the country as a whole had been plagued by a number of problems, primarily related to administration and infrastructure, lack of industrialization, poor communication, a large population, unemployment, and poverty. The challenges at the national level also translated into individual components of the economy. Problems in the agriculture sector were particularly severe – they included disorganized farming, poor yield (despite favorable conditions), crop damages from floods and pests.1 Lack of application of modern techniques, no guidance or training, and improper marketing. Furthermore, small farmers’ land holdings in the villages (in East Pakistan) ranged from one to five acres * Nasim Yousaf is an independence researcher and historian, author of many books on Allama Mashriqi. -
THE DEVELOPMENT of MICROFINANCE in PAKISTAN by Amer Saleem Khan & Stefan Platteau*
THE DEVELOPMENT OF MICROFINANCE IN PAKISTAN By Amer Saleem Khan & Stefan Platteau* INTRODUCTION The Role of Financial Services in Poverty Alleviation1 Microfinance implies financial services of very small magnitude provided to the economically active poor usually for short to medium terms. These financial services include loans, savings, money transfer services and leasing services. The significant feature of microfinance is its reliance on “social collateral” as a means of risk management instead of physical collateral. The concept of Social Collateral merits further explanation. Collateral tries to solve the information asymmetry problem and reduce costs for the lender. Banks take physical collateral because they realize that their access to information about the borrower’s business and related cash flows is limited and strict borrower monitoring entails costs. However, the lender rests assured that in case of borrower’s failure to make payments, the collateral, value of which is independent of the borrower’s economic condition can be liquidated to cover the default risk. But this risk coverage is not applicable in case of microfinance where the poor cannot provide collateral. The lender in this case has to rely on its estimates of future cashflow and the past repayment behaviour of borrower as a measure of debt capacity as well as the willingness to repay loans. No one is a better judge of financial habits of a prospective borrower than his friend, neighbour or a family member. This is particularly effective when this social circle itself is a set of prospective borrowers. These potential borrowers provide cross guarantees taking responsibility individually as well as collectively for the repayment of their fellow “group” members. -
Tanzania Microenterprise Impact Assessment – Bagamoyo Case Study
Integrated Coastal Management, Livelihood Development and Micro-Loan Strategies: The Case of the TCMP-FINCA Partnership in the Bagamoyo District of Tanzania By: ElinTorell, Baraka Kalangahe, Renalda Munubi, Shalli Mwanahija, and Brian Crawford The Sustainable Coastal Communities and Ecosystems Program (SUCCESS) In Association with The Tanzania Coastal Management Partnership (TCMP) This publication is available electronically on the Coastal Resources Center’s website at http://www.crc.uri.edu. For more information contact: Coastal Resources Center, University of Rhode Island, Narragansett Bay Campus, South Ferry Road, Narragansett, Rhode Island 02882, USA. Tel: 401) 874-6224; Fax: 401) 789-4670; Email: [email protected] Citation: Torell, Elin, Baraka Kalangahe, Renalda Munubi, Shalli Mwanahija,and Brian Crawford, 2007, Integrated Coastal Management, Livelihood Development and Micro-Loan Strategies: The Case of the TCMP-FINCA Partnership in the Bagamoyo District of Tanzania, Coastal Resources Center, University of Rhode Island. pp. 14 Disclaimer: This report was made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of the authors and do not necessarily reflect the views of USAID or the United States Government. Cooperative agreement # EPP-A-00-04-00014-00 i Table of Contents Page Introduction.....................................................................................................................................1 -
The Microfinance Illusion Milford Bateman
‘Why Doesn’t Microfinance Work? The Destructive Rise of Local Neoliberalism’ Milford Bateman Research Fellow, Overseas Development Institute (ODI), London Book launch presentation ODI London July 5th, 2010 The birth of Microfinance [MF] in late 1970s Bangladesh… • Long history of small-scale credit in India, Pakistan and then Bangladesh – Akhtar Hameed Khan’s ‘Comilla model’ • In late 1970s Dr Muhammad Yunus sees microcredit examples and develops his own model - pitches it to the donor community • Grameen Bank formally established in 1983 to lend to the poor for income-generating activities (IGAs) • ‘Poverty will be eradicated in a generation (and) our children will have to go to a “poverty museum” to see what all the fuss was about…’ • International donors love the non-state, self-help, fiscally responsible, and individual entrepreneurship angles • Supposedly high repayment rates in Grameen Bank (much exaggeration later found) mean the poor seen as ‘bankable’ Washington DC institutions insist on a few changes… • In 1980s policymakers in World Bank and US government pushing the mantra of ‘full cost recovery’ • Hard-line belief is that the poor must pay the FULL costs of any program ostensibly designed to help them • MF to be no exception….MF is neoliberalised... • CGAP and USAID appointed to take lead in imposing the ‘New Wave’ MF model that replaces the Grameen Bank as ‘preferred practise’ • Key methodology to impose high interest rates and Wall Street-style rewards (high salaries, bonuses, share options) which should lead to maximum efficiency But by late 2000’s MF begins to run into a host of problems • By early 2000s MF increasingly becomes clear that MF ‘all talk and no walk’ - poverty not actually seen to be reduced anywhere • More scope to critically analyse what accomplishments have really been made.... -
Making the Poor Pay for Public Goods Via Microfinance: Economic and Political Pitfalls in the Case of Water and Sanitation
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Mader, Philip Working Paper Making the poor pay for public goods via microfinance: Economic and political pitfalls in the case of water and sanitation MPIfG Discussion Paper, No. 11/14 Provided in Cooperation with: Max Planck Institute for the Study of Societies (MPIfG), Cologne Suggested Citation: Mader, Philip (2011) : Making the poor pay for public goods via microfinance: Economic and political pitfalls in the case of water and sanitation, MPIfG Discussion Paper, No. 11/14, Max Planck Institute for the Study of Societies, Cologne This Version is available at: http://hdl.handle.net/10419/50556 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under -
Social Entrepreneurship Before Neoliberalism? the Life and Work of Akhtar Hameed Khan
Working Paper Series January 2019 Social entrepreneurship before neoliberalism? The life and work of Akhtar Hameed Khan Working Paper 02-19 David Lewis David Lewis LSE Department of Social Policy The Department of Social Policy is an internationally recognised centre of research and teaching in social and public policy. From its foundation in 1912 it has carried out cutting edge research on core social problems, and helped to develop policy solutions. The Department today is distinguished by its multidisciplinarity, its international and comparative approach, and its particular strengths in behavioural public policy, criminology, development, economic and social inequality, education, migration, non-governmental organisations (NGOs) and population change and the lifecourse. The Department of Social Policy multidisciplinary working paper series publishes high quality research papers across the broad field of social policy. Department of Social Policy London School of Economics and Political Science Houghton Street London WC2A 2AE Email: [email protected] Telephone: +44 (0)20 7955 6001 lse.ac.uk/social-policy Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. To cite this paper: Lewis, D (2019), Social Entrepreneurship before neoliberalism? The life and work of Akhtar Hameed Khan, Social Policy Working Paper 02-19, London: LSE Department of Social Policy. Social Policy Working Paper 02-19 Abstract The life history method can be used to historicise the study of social and public policy. Reviewing the life and work of Pakistani social entrepreneur A.H. Khan provides a useful reminder that what Jyoti Sharma recently termed ‘the neoliberal takeover of social entrepreneurship’ is a relatively recent phenomenon. -
Examining the Effects of Information and Group Member Relationships
EXAMINING DETERMINANTS OF GROUP LOAN REPAYMENT IN THE DOMINICAN REPUBLIC A thesis presented to the faculty of the Center for International Studies of Ohio University In partial fulfillment of the requirements for the Masters of Arts Danielle Matta June 2004 This thesis entitled EXAMINING DETERMINANTS OF GROUP LOAN REPAYMENT IN THE DOMINICAN REPUBLIC By Danielle Matta Has been approved for the Center for International Studies by Julia Paxton Assistant Professor of Economics Josep Rota Director, Center for International Studies Matta, Danielle. M.A. June 2004. Examining Determinants of Group Loan Repayment in the Dominican Republic (88pp.) Thesis Advisor: Julia Paxton This thesis proposes to determine if different components of group dynamics in microfinance group lending programs such as information symmetry, group size, and group member relationships affect both group loan repayment and group mechanisms such as peer pressure and group solidarity. The research presents empirical evidence from the ADOPEM group lending program in the Dominican Republic. A Tobit Model was created from the data that shows smaller group size, groups composed of family members, and group solidarity can all lead to higher loan repayment rates. Approved: Julia Paxton Assistant Professor of Economics To Justin for his love and support 5 Table of Contents Chapter 1 Introduction..........................................................................................................................7 History of Microfinance.......................................................................................................8 -
Overview of Microfinance Outreach
ISSN: 2278-3369 International Journal of Advances in Management and Economics Available online at: www.managementjournal.info RESEARCH ARTICLE Microfinance Industry: Sustainability, Outreach and Impact Drasarova Martina*, Srnec Karel Faculty of Tropical Agri Sciences, Czech University of Life Science, Prague, Czech Republic. *Corresponding Author: Address: E-mail:[email protected] Abstract Microfinance has been seen as a key tool for poverty alleviation in least developed countries (LDCs). Target groups of microfinance are very poor people who have no access to any financial resources and need loans. Credits help the poor in running their small businesses or in a creation of its own job opportunities. The loans are often embezzlemented, are not financial sustainable in the long term, and are frequently critised. The question is if microfinace is real universal cure and which influence has got on elimination poverty and social even economical effect. It also considers a perspective of model preferences focused on business (conditional high interests, possibility to contact intermediaters, gaining easier access into external finacial sources) or a charity that is resistant to crisis thanks to using internal financial sources. Microfinancial sector in least developed countries consists of microfinancial institutions (MFIs), microfinance products and the programs that cause poverty alleviation using an appropriate tools. Are microloans medicine or not? Is this sector indispensable for the elimination of the poverty? The results are evident in a triangle of finance that might be in a synergy of these components: financial sustainability, welfare impact (direct/indirect) and outreach (breadth and depth). This article is structured in four sections, each of them is analyzing its background, positions and limits across the microfinancial sector. -
Individual Microcredit and Social Pressure
View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics INDIVIDUAL MICROCREDIT AND SOCIAL PRESSURE Laure JAUNAUX1, Baptiste VENET2 Summary: The purpose of this article is to analyse the efficiency of the repayment incentive mechanisms used for individual microcredit, the guarantor mechanism in particular. Little academic research has been devoted to this instrument whereas it is very frequently used. Churchill (1999) notably underscored the fact that, within the framework of microfinance institutions (MFI), the guarantor acts as a vector of social pressure on the borrower rather than as an alternative source of reimbursement. Little to no econometric studies have been devoted to testing this assumption. This is what we propose to do in this article, based on original data from a Brazilian microcredit programme, VivaCred, operating in the Rio de Janeiro favelas. Using a simple theoretical model, we will first of all describe the relations between an individual microcredit institution and a borrower in order to highlight the role of social sanction. Next, with an ordered multinomial logit model, we will study the probability of a change in behaviour by the borrower in terms of adherence to the repayment schedule. To be more precise, we will analyse the behaviour of borrowers with repayments significantly overdue in order to determine what encourages them to adhere to repayment deadlines in the future (economic conditions, policy of the MFI, etc.). In particular, results show that the number of guarantors has a positive impact on the likelihood of adherence to the loan repayment schedule in the future.