Preview

Microfinance Case Study --Suitable model in China

Best Essays
Open Document
Open Document
1893 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Microfinance Case Study --Suitable model in China
Microfinance Case Study
--Suitable model in China

Presented by Yonghan Chen
Present to Glenn Francis
Date: June 2, 2013

Table of contents

Executive summary 3

Problem Statement 4

Data analysis 5

Key Decision Criteria 8

Alternatives analysis 8

Recommendation 9

Action and Implementation Plan 10

Exhibits 11

Work Cited 13

Bibliography 14

Executive Summary

Since Garmeen bank model is conducive to reduce poverty, more and more developing countries accept Microfinance project as a tool to help rural people in their own countries. However, this case study demonstrates the bottleneck of Microfinance project in China, which can be concluded as implementation of government policy, working structure and lack of non-banking activities. Take the essence and discard the dregs of Indian experience, China has to apply Garmeen model into Chinese model. According to analyzing exist data, I present three alternatives to solve the problem. Moreover, after recommendation of alternatives, I provide an action plan, include but not limited in Money loan, extra non-banking activities and new working structure, which can effectively work in China. Action plan start with basic information analysis, target choice and provide further detail of non-banking activities.

1. Problem Statement Microfinance, which can be described as an effective tool of poverty reduction, is successfully operated in Bangladesh. However, a controversial issue is that other developing countries are hard to keep pace with the Micro-model against poverty of society and burden of rural people, especially in China. In some way, China becomes a strange developing country which contains approximately $8.227 trillion nominal GDP but still has roughly 55% rural people (The World Bank, 2008-2012). As far as I know, implementation of government policy, working structure of



Bibliography: 4. Du Xiaoshan, some views on the possibility of foreign investment in the China microfinance, February, 2008. 5. Jiao Jinpu, etc. “Microfinance and rural finance,” China’s finance publisher, October, 2006. 6. Knowledge@Wharton, May 10, 2006, Microfinance in China: Growth and Struggle http://knowledge.wharton.upenn.edu/article.cfm?articleid=1471 16. Weiyong Yang, 2006, Reforms, Structural Adjustments, and Rural Income in China, http://chinaperspectives.revues.org/575 17. Wang Shuguang etc., “Rural Finance,” Peking University Press, 2008

You May Also Find These Documents Helpful

  • Good Essays

    The story “Let the Circle be unbroken” starts with the Logan children, and Mr. Logan or Papa riding in a wagon to go to Mrs. Lee Annie Lees to go check on a sick mule. On their way there Cassie thinks she sees Wordell go into the woods. When they got to Mrs. Lee Annie Lees Mr. Logan left Logan kids in front of her place, as he go attends to the sick Mule. While Mr. Logan was gone the Logan kids talked to Son-Boy, Lee Ellis, and Waynard, and Little Willie, who were waiting for Clarice. The children started talking about TJ Avery who was their friend, that got caught up into some trouble with the Simm’s kids. They said that TJ killed Mr. Barnett, but in all actuality The Simm’s kids did. TJ is currently In Jail. While they were in the conversation, Dube Cross a 16 year old came and asked if they had any jobs open for him to earn some milk. Stacey offered him to milk the cow, and Dube said that he’d do it tomorrow morning, and left. When Clarice finally came, Waynard, and Little Willie left with Clarice. After they left Mr.Logan and Mrs. Lee Annie Lees came out and she ushered the Logan kids to come in her place. In the house there was Mr. Tom Bee, and they sat down and ate peanuts, after a while Mr. Page Ellis, Son-Boy, and Javan came in with Russel who was Mrs. Lee Annie Lees grand son that joined the army. When they came in they were happy to see him, since they haven’t seen him for a long time. They talked to Russel about how he needs to be careful going into the Delta with the Army uniform on because there was some White Bigots, and red necks out there. The conversation soon turned to TJ’s situation, and explained to Russel what was happening, and how Mr. Jamison their Lawyer is trying to get him a trial. This was when Son-Boy told the other kids to come with him outside. Outside Son-Boy presented them his marbles, and his prized possession which was the emerald-green marble, which he let no body touch. The other children were amazed, and when they started…

    • 2717 Words
    • 11 Pages
    Good Essays
  • Better Essays

    The first feature of microfinance that comes to one’s mind is its huge growth potential. As stated in the case, only 20% of overall demand for microfinancing is being met. 420 million people don’t have access to microfinance according to Exhibit 5. Microfinance is believed to be rather helpful in improving people’s lives. Using the small credits, clients start their small businesses improve and their living standards which should lead to increase of life conditions in the whole country. The experience can also attract international companies to open plants and fabrics there as lack of skilled working power is one of the main constrain in FDI. However there is no clear evidence on the real impact of microfinancing on macro level. Moreover MFIs are not transparent at all, which is a huge disadvantage from investor’s point of view. Investors want to know the business they are investing in.…

    • 1246 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    SOX ACT ARTICLE REVIEW

    • 359 Words
    • 2 Pages

    “The SOX Act was intended to impose stricter regulation and controls on how corporations do business through regulation of three broad areas: auditing, financial reporting, and internal corporate governance. The SOX Act also provided for additional enforcement apparatus and increased penalties for violation of existing securities laws.” (Melvin, 2011) “The SOX Act was intended to impose stricter regulation and controls of how corporations do business through regulation of three broad areas: auditing, financial reporting, and internal…

    • 359 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The Civil war, which began in 1861, came to an end on May 13th,1865, and the Union claimed the victory. But the South were victorious in many of the earlier battles of the war, but at first they had a strong military leadership. The South’s defeat was due to poor strategy in the military and the appointment of weak generals, many people also believe that political leadership, foreign support, the supply of the army and war economics were reasons they didn’t win.…

    • 294 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Issues of Poverty

    • 575 Words
    • 3 Pages

    Second, actions to alleviate poverty should focus on local needs and be sustainable to maximize its positive impact. We have witnessed the remarkable success of microfinance – a social business that focuses on making financial services accessible to the rural poor. Microfinance fills the gap where large commercial banks are unable to provide due to the cost constraint. Microfinance provides the avenue for the poor to take out small loans to grow their domestic business as well as a relatively safe platform for saving and investment. It has…

    • 575 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Poverty is number one of the world problem. United Nation set “End Poverty and Hunger” as number one in Millennium Development Goal that should achieve in 2015. Grameen Bank is Bank that operates in Bangladesh since 1976 focusing giving loan to the poor. When other bank reluctant to give loan to the poor, Grameen Bank did it very well. Until now Grameen Bank has 8.35 million borrower, 96 percent is woman and Loan recovery rate is 96.67 percent. Grameen Bank has a great contribution to reduce poverty in Bangladesh. According to a recent Grameen internal survey, 68 per cent of Grameen borrowers' families of Grameen borrowers have crossed the poverty line. The remaining families are moving steadily towards the poverty line from below.…

    • 1193 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    References: Bhatt, N., & Tang, S. (2001). Delivering microfinance in developing countries: Controversies and policy perspective. Policy studies Journal, 29, 319.…

    • 1142 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    The appropriateness of microcredit as a tool for reducing poverty depends on local circumstances. Poverty is often the result of low economic growth, high population growth, and extremely unequal distribution of resources. The proximate determinants of poverty are unemployment and the low productivity of the poor. When poverty results from unemployment, reducing poverty requires creating jobs; when poverty results from low productivity and low income, reducing poverty requires investing in human and physical capital to increase workers' productivity. In many countries, such as Bangladesh, poverty is caused by lack of both physical and human capital. Consequently, the best way to reduce poverty is to deal with both problems: increasing productivity by creating employment and developing human capital. One way to increase the productivity of the poor is through broad based economic growth. Such growth ensures more inclusive participation in development by providing widespread employment.…

    • 6277 Words
    • 26 Pages
    Powerful Essays
  • Powerful Essays

    Mfi-Survey-Questionnaire

    • 5292 Words
    • 22 Pages

    NATIONAL ANTI-POVERTY COMMISSION TA 4544: ENHANCING ACCESS OF THE POOR TO MICROFINANCE SERVICES IN FRONTIER AREAS…

    • 5292 Words
    • 22 Pages
    Powerful Essays
  • Good Essays

    Micro enterprise financing, or the provision of access to micro entrepreneurs of small-scale loans and other financing-related services has been widely credited as a sustainable tool for reducing poverty. The microfinance movement, which the Grameen Bank started and pioneered in Bangladesh during the 1980s, has been replicated in other parts of the world, including the Philippines.…

    • 572 Words
    • 3 Pages
    Good Essays
  • Good Essays

    References: Arsyad L (2005). An assessment of performance and sustainability of Microfinance Institutions: A case study of Village credit institutions in Gianyar, Bali, Indonesia, unpublished PhD thesis, Flinders University, Australia. Basu JC, Woller G (2004). Microfinance a comprehensive review of existing literature, J. Entrepreneurial Finance and Bus. Ventures 9(1):1-26. Cull R, DemigÄuc-Kunt A, Morduch J (2007). Financial performance and outreach: A global analysis of leading microbanks. Econ. J. 117(517): 107-133. Hartarska V (2005). Governance and performance of microfinance institutions in central and eastern Europe and the newly independent states. World Dev. 33: 1627-1648. Hishigsuren G (2004). Scaling up and mission drift: Can Microfinance institutions maintain a poverty alleviation mission while scaling up? Unpublished PhD thesis, Southern New Hampshire University. Kereta B (2007). Outreach and Financial performance analysis of Microfinance Institutions in Ethiopia, African Economic Conference, Addis Ababa. Kindane A (2007). Outreach and Sustainability of the Amhara Credit and Saving Institutions (ACSI) Ethiopia, MA thesis, Norwegian…

    • 8617 Words
    • 35 Pages
    Good Essays
  • Better Essays

    Microfinance programmes are intended to reach poor segments of society as they lack access to financial services. It seeks to reach out to the excluded category of population from the banking system. Financial inclusion is not just credit dispensation, its about connecting the people with the banking system for availing bouquet of financial services including access to payment system.…

    • 4403 Words
    • 18 Pages
    Better Essays
  • Powerful Essays

    Microfinance has evolved as a potent driver of financial inclusion in Bangladesh with much positive impact on poverty alleviation and other social development indicators. The microfinance industry in Bangladesh started its operations with support from Bangladesh bank and donors’ grants during late 1970s with the objectives of delivering micro financial services among the poor people for poverty alleviation. The industry has evolved from its initial focus on credit, disbursing standardized loan products and collecting obligatory savings to the development of diversified loan, flexible savings and other micro financial products. This sector has now attained maturity and entered into dynamic…

    • 6854 Words
    • 28 Pages
    Powerful Essays
  • Good Essays

    History of Microfinance

    • 628 Words
    • 3 Pages

    a means of extending credit, usually in the form of small loanswith no collateral, to nontraditional borrowers such as the poor inrural or undeveloped areas. This approach was institutionalized in1976 by Muhammad Yunus, an American educated Bangladeshieconomist who had observed that a significant percentage of theworld's population has been barred from acquiring the capitalnecessary to rise out of poverty. Yunus set out to solve thisproblem through the creation of the Grameen Bank in Bangladesh.The Grameen approach is unique because the small loans areguaranteed by members of the borrower's community; pressurewithin the group encourages borrowers to pay back the loans in atimely manner. Grameen's clients are among the poorest of thepoor, many of whom had…

    • 628 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Over the past decades, the development of the Chinese financial system has been an integral part of the improvement and growth of the Chinese economy. It has provided an intermediation role for the reutilizing of Chinese savings into the financing of enterprises. In this regard, the banking system has been and remains the dominant institution, although banks in China have not reached all the sectors equally. This intermediation role of the banking system has benefited very less SMEs and the rural & agriculture sectors than other sectors. The most vital source to increase productivity for SMEs was only financing which remains a bottleneck in their development.…

    • 605 Words
    • 3 Pages
    Good Essays