Summary
Summary MICRO-FINANCE INSTITUTIONS
- Course
- Institution
- Book
MICRO-FINANCE INSTITUTIONS
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
ProfDavi
Content preview
LESSON VIIMICRO-FINANCE INSTITUTIONS
Microfinance is the provision of a broad range of financial services such as –deposits,
loans, payment services, money transfers and insurance products – to the poor and low-
income households, for their microenterprises and small businesses, to enable them to
raise their income levels and improve their living standards. MFIs are financial
institutions that specialize in lending to small and medium sized enterprises. Unlike banks,
MFIs rely on stakeholders and grants, donors and trust funds-besides earning interest from
loans to SMEs that qualify. MFIs are governed by the Micro Finance act of 2006-
Examples are Jamii Bora and Faulu Microfinance, Kenya Women Micro Finance Bank
etc.
Importance of micro-finance
1. They provide financial services to self-employed and low income earners
2. Major financier of small-scale business
3. Provide their loans with an affordable rate
4. Supervise or inspect the business against which financial services is provided
therefore acting as an impetus to having more people in the economic venture into
business.
Key operating Principles for Microfinance
1 The poor needs access to appropriate financial services
2 The poor has the capability to repay loans, pay the real cost of loans and generate savings
3 Microfinance is an effective tool for poverty alleviation
4 Microfinance institutions must aim to provide financial services to an increasing number
of disadvantaged people
5 Microfinance can and should be undertaken on a sustainable basis
6 Understanding the Market – A successful MFI understands its market and designs
products that serve its clients
7 Streamlined Operations – Streamlined operations help MFIs make efficient use of
resources and keep cost low
8 Informal Sector Practices – This practices help an MFI manage risk, motivate repayment,
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ProfDavi. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
73918 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now