The Role of Microfinance Institutions to the National Economic Growt
UNIVERSITY OF GREENWICH COURSEWORK COVERSHEET
STUDENT NAME STUDENT ID NUMBER COURSE CODE TITLE OF COURSE TITLE OF ASSESSMENT TYPE OF ASSESSMENT TUTOR’S NAME DATEOF ASSESSMENT
DERIBE MENGESHA 000799350 BUSI 1546 FOUNDATIONS OF SCHOLARSHIP AND RESEARCH THE ROLE OF MICRO FINANCE IN NATIONAL ECONOMIC GROWTH TOPIC REVIEW DR. GIRMA GEZAHEGN JULY 17, 2013
TABLE OF CONTENTS
1. INTRODUCTION 2. DEFINITION OF MICROFINANCE 3. KEY CHARACTERISTICS OF MICRO FINANCE 4. DEBATE ON IMPACTS OF MICRO FINANCE 4.1 IMPACT ON POVERTY REDUCTION 4.2 THE INTEREST RATE 5. THE CONTRIBUTIONS OF MICRO FINANCE TO NATIONAL ECONOMIC GROWTH 6. MICRO FINANCE AND GROWTH IN RELATION TO TWO COUNTRIES 6.1 THE CASE OF ETHIOPIA 6.1 THE CASE OF BANGLADISH
7. CONCLUDING REMARK 8. REFERENCES
4 5 5 6 6 7
8
9 9 10 11
2
ACCRONYMS
AEMI: MRA: MFIs: MIS: GDP: ETB: TK: NGOs: Association of Ethiopian Microfinance Institutions Microcredit Regulatory Authority Microfinance Institutions Management Information Service Gross Domestic Product Ethiopian Birr Bangladeshi Takka Non-Governmental Organizations
3
1. INTRODUCTION
The concept of micro finance was first introduced in Bangladesh by Nobel Peace Prize Winner Muhammed Yunus. Professor Yunus started Grameen Bank or Village Bank more than 30 years ago with the aim of reducing poverty by providing small loans to the country’s rural poor. (Yunus 1999) Micro finance has evolved over the years and does not only provide credit to the poor but also now widen services including savings insurance remittances or fund transfer and non-financial services such as financial literacy and skills development programs;Micro credit is now referred to as micro finance. Morduch (2008) A key feature of micro finance has been the targeting of women on the grounds that compared to men they perform better as clients of micro finance institutions and that their participation has more desirable development outcomes. (Pitt and Khandker 1998). In addition to that women constitute a
STUDENT NAME STUDENT ID NUMBER COURSE CODE TITLE OF COURSE TITLE OF ASSESSMENT TYPE OF ASSESSMENT TUTOR’S NAME DATEOF ASSESSMENT
DERIBE MENGESHA 000799350 BUSI 1546 FOUNDATIONS OF SCHOLARSHIP AND RESEARCH THE ROLE OF MICRO FINANCE IN NATIONAL ECONOMIC GROWTH TOPIC REVIEW DR. GIRMA GEZAHEGN JULY 17, 2013
TABLE OF CONTENTS
1. INTRODUCTION 2. DEFINITION OF MICROFINANCE 3. KEY CHARACTERISTICS OF MICRO FINANCE 4. DEBATE ON IMPACTS OF MICRO FINANCE 4.1 IMPACT ON POVERTY REDUCTION 4.2 THE INTEREST RATE 5. THE CONTRIBUTIONS OF MICRO FINANCE TO NATIONAL ECONOMIC GROWTH 6. MICRO FINANCE AND GROWTH IN RELATION TO TWO COUNTRIES 6.1 THE CASE OF ETHIOPIA 6.1 THE CASE OF BANGLADISH
7. CONCLUDING REMARK 8. REFERENCES
4 5 5 6 6 7
8
9 9 10 11
2
ACCRONYMS
AEMI: MRA: MFIs: MIS: GDP: ETB: TK: NGOs: Association of Ethiopian Microfinance Institutions Microcredit Regulatory Authority Microfinance Institutions Management Information Service Gross Domestic Product Ethiopian Birr Bangladeshi Takka Non-Governmental Organizations
3
1. INTRODUCTION
The concept of micro finance was first introduced in Bangladesh by Nobel Peace Prize Winner Muhammed Yunus. Professor Yunus started Grameen Bank or Village Bank more than 30 years ago with the aim of reducing poverty by providing small loans to the country’s rural poor. (Yunus 1999) Micro finance has evolved over the years and does not only provide credit to the poor but also now widen services including savings insurance remittances or fund transfer and non-financial services such as financial literacy and skills development programs;Micro credit is now referred to as micro finance. Morduch (2008) A key feature of micro finance has been the targeting of women on the grounds that compared to men they perform better as clients of micro finance institutions and that their participation has more desirable development outcomes. (Pitt and Khandker 1998). In addition to that women constitute a
References: 5 THE CONTRIBUTIONS OF MICRO FINANCE TO NATIONAL ECONOMIC GROWTH Even the vocal critic Thomas Dichter (2006) admits that micro finance can help the poor 's smooth consumption over period of unexpected crises