Market Failure Hih Case Study

1-What are the institutional voids/ deficiencies highlighted by The Case?

Answer:

HiH’s vision was “a world free of extreme poverty and child labour,” which it worked to achieve through improved education, employment, income generation opportunities, and empowerment. Because of the multifaceted nature of poverty, HiH sought to implement its five main program areas simultaneously.

Child Labour and Education: The census figures did not include children engaged in the agricultural and domestic sectors, many groups maintained that the number of child workers was significantly higher. Sources varied widely, but some unofficial estimates claimed that India had a child labour force in excess of 100 million. 29% of the country’s children, ages
To assist the poorest and most marginalized groups in gaining access to improved healthcare.
Microfinance and Self-Help Groups: Last but not least was HiH’s microfinance program. The objective of the microfinance initiative was both to alleviate rural poverty and empower women.

2-What is the market failure HiH was founded to address? What problems do its clients face and why have they not been solved by government and market forces?
Answer:
The market failure HiH was founded to addressed which its clients face and which have they not been solved by government and market forces are as explained below: HiH aspired “to be the best run company in the world,” it still had many other challenges to address in managing its rapid growth. Like HiH had few formal linkages between the five groups. Moreover, because of the organization’s rapid growth, most employees were relatively new to HiH and had not had time to develop effective informal linkages. While the five programs were designed to operate in unison within the communities where HiH was working, there was often insufficient internal coordination to optimize potential
Microfinance is being hailed as a sustainable tool to combat poverty, combining a for-profit approach that is self-sustaining, and a poverty alleviation focus that empowers low-income households. Microfinance is increasingly becoming a tool to exercise developmental priorities for governments in developing countries. But there has been a gradual realization that microfinance alone is not enough. Microfinance is not a replacement for jobs that are not there, markets that are inaccessible, or education and skills that do not exist. Particularly, the main objective of microfinance institutions - poverty alleviation - requires a holistic and in-depth understanding of the interplay between economic, social, cultural extracts of the developmental process. Understanding the problems, and the cause-effect relationships, is critical for a holistic view of development. There will always be problems behind the problems. For example, some of the commonly cited 'problems' of developing countries, such as high population growth, poverty and very poor people, pollution and bad local environments, or low water resources are indeed effects of deeper problems that lie behind it: lack of political will and leadership, bad development and