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Informal Financial Services, a Panacea for SMEs Financing? A Case Study of SMEs in the Ashanti Region of Ghana  [PDF]
Solomon Kwarteng Forkuoh, Yao Li, Emmanuel Affum-Osei, Isaac Quaye
American Journal of Industrial and Business Management (AJIBM) , 2015, DOI: 10.4236/ajibm.2015.512075
Abstract: It has been established that Small and Medium enterprises (SMEs) play significant roles in the economic development of most countries in terms of job creation, innovation of new ideas, contribution to Gross Domestic Product and welfare, but the ability of SMEs to implement growth and developmental programs highly depend on access to external finance among other factors. Against this backdrop, the persistence citing of limited access to finance by SMEs in the Sub-Saharan African countries which places impediments on their business activities is worrisome to both the entrepreneurs and the State. In spite of several efforts by various governments and relevant institutions in rolling out support policies and initiatives in making access to external finance by SMEs more accessible, the problem still persist and SMEs maybe are yet to reap the full benefits from such initiatives. This research work does not rule out the fact that there exist alternative ways of financing SMEs outside the formal financial system, but this research focuses on the accessibility of the informal financial systems, with much emphasis on family and friends, their effectiveness, and how to meet the criteria for accessing the finance. The results show that SMEs that meet the requirements (trust, reputation, relation (family affiliation), religious affiliation,) of the lenders have easy access to alternative external finance, but the major challenges SMEs face when accessing the funds are the limited size of the loan and how to meet the demands of the lenders. On the lenders side, high defaulting rate is their major challenge. With careful modification without compromising the traditions involving the system, informal financial system will play significant role in providing the financial needs of SMEs.
Microfinance  [PDF]
Ranjana M.Chavan
Golden Research Thoughts , 2013, DOI: 10.9780/22315063
Abstract: Microfinance sector has grown rapidly over the past few decades. Nobel Laureate Muhammad Yunus is credited with laying the foundation of the modern MFIs with establishment of Grameen Bank, Bangladesh in 1976. Today it has evolved into a vibrant industry exhibiting a variety of business models. The microfinance sector is having a healthy growth rate, there have been a number of concerns related to the sector, like grey areas in regulation, transparent pricing, low financial literacy etc. In addition to these concerns there are a few emerging concerns like cluster formation, insufficient funds, multiple lending and over-indebtedness which are arising because of the increasing competition among the MFIs.
Microfinance Risk Management with Work Breakdown Structure  [PDF]
Junxiang Liu
Journal of Financial Risk Management (JFRM) , 2012, DOI: 10.4236/jfrm.2012.13007
Abstract: Building inclusive financial system in China makes microfinance products become practical tools in solving financial difficulties of small and medium enterprises (SMEs). Discuss general management risk of microfinance under effective credit structure and then analyze the Work Breakdown Structure (WBS) in microfinance management from the perspective of project management effectiveness. Moreover, use ergonomics and probability theories to find out the effects on microfinance management through institutions with simpleness and swift. It is demonstrated that optimization of microfinance management program under inclusive financial sectors can probably be beneficial to microfinance credit risk control
Microfinance and Inequality  [cached]
Hisako Kai,Shigeyuki Hamori
Research in Applied Economics , 2009, DOI: 10.5296/rae.v1i1.304
Abstract: The paper examines the relationship between microfinance and inequality by providing a cross-country empirical study of 61 developing countries. We show that microfinance plays an important role in creating a financial system endowed with the equalizing effect. Thus far, only a few single-country analyses of the impact of microfinance on inequality have been performed. To the best of our knowledge, our study is the first to indicate the universality of the equalizing effect of microfinance by applying the cross-country methodology. We find that microfinance can lower inequality and that poorer countries need to focus more on the equalizing effects of microfinance.
The Development Perspective of Finance and Microfinance Sector in China: How far is Microfinance regulations?
M. Wakilur Rahman,Jianchao LUO
International Journal of Economics and Finance , 2011, DOI: 10.5539/ijef.v3n1p160
Abstract: The paper reviews the development process of bank and microfinance sector in China and present regulatory status. Financial sector is largely bank-based and dominated by the four state commercial banks in China. However, government liberal policy and special attention to financing underdeveloped regions and SMEs have gradually improved the scenario. The development of non-state banks, non-bank financial institutions and MFIs has extended financial services to the areas where state banks were previously not so active. Consequently, government banks, microcredit companies along with some national and international MFIs and donor agencies have started their business in a significant pace but the market freedom is still questionable? The benefit of microfinance services lies on government favorable policy formulation and allowing MFIs reasonable freedom to booming the sector. Thus, it is suggested that government authorities should take necessary steps for resolving the existing barriers of the promising microfinance sector in China.
Regulation and supervision of microfinance in Albania  [cached]
Rezart Hoxhaj
Business and Economic Horizons , 2010,
Abstract: This paper describes important regulation issues that concern microfinance. It starts byconsidering literature on how and why to regulate and supervise microfinance. Considering thespecific case of microfinance in Albania, it analyzes the context of this industry and someparticular issues that might influence its growth. Related regulation in Albania seems to be notactivity-oriented since a real definition of microfinance is lacking in the Albanian law. Therefor,Albanian microfinance sector needs, first of all, a microcredit and microfinance definition toimplement the right development policies and avoid confusion and license misuse. Moreover, theregulatory framework seems to be too restrictive for institutions supposed to be engaged inmicrofinance example high capital requirement and provisioning. Possible interventions can be inlowering minimum capital requirements for NBFIs to improve entrance, simplifying procedures,documentation and harmonization of the taxation treatment of institutions to enhancedevelopment, encourage access and avoid market distortions. There is the need to implementregulation considering microfinance as an activity, and develop a regulatory framework to inducecommercial banks integrate downward into the microfinance market and help informal start-upsinstitutions develop and get formalized.
Impact Analysis of Microfinance in Nigeria  [cached]
Babajide Abiola
International Journal of Economics and Finance , 2011, DOI: 10.5539/ijef.v3n4p217
Abstract: This paper applies the financing constraints approach to study whether microfinance institutions improved access to credit for microenterprises in Nigeria or not. According to this approach, microenterprises with improved access to credit rely less on internal funds for their investments. Thus, investment sensitivity to internal funds of micro enterprises in Lagos State (a municipal with significant presence of Microfinance Banks (MFBs) was compared to that of micro enterprises in Ekiti State (a municipal with no (or limited) presence of MFBs) using a cross sectional survey method and Microfinance Institutions (MFI) branch location data. Results indicate that MFBs alleviated micro businesses’ financing constraints. This approach is applicable to evaluating microfinance impact in other countries.
Bridging the SME Financing Gap in Ghana: The Role of Microfinance Institutions  [PDF]
Isaac Quaye, Eugene Abrokwah, Alfred Sarbah, Joseph Yaw Osei
Open Journal of Business and Management (OJBM) , 2014, DOI: 10.4236/ojbm.2014.24040
Abstract: Financing Small and Medium-Scale Enterprises (SMEs) to achieve the desirable growth and expansion has been topical for governments, policymakers, non-governmental organizations (NGOs), financial and non-financial institutions. The recent upsurge in the interest of finding ways of bridging the financing gap faced by SMEs by these stakeholders have been necessitated by the enormous contributions of SMEs to the economic development and growth of countries in areas of job creation, GDP and entrepreneurial skill development. This research therefore sought to access the role of one of the stakeholders, microfinance institutions (MFIs) in helping to bridge the financing gap faced by SMEs in Ghana. The research established that there was indeed the existence of SME financing gap in the country as most of them were denied access to credit by commercial banks and other financial institutions. The research revealed that the operations of microfinance institutions (MFIs) are having positive impact on SMEs. The study also revealed some risk mitigation tools used by MFIs in granting loans to SMEs which included provision of collateral security in the form of land or any other valuable asset, business records, credit history among others. The research concluded with some recommendations on how the SME financing gap can further be bridged by MFIs and other stakeholders which included provision of support services to SMEs by MFIs such as training services in credit management as well as the need for MFIs to improve service delivery such as faster loan approval times.
An Assessment of the Kwabre District Mutual Health Insurance Scheme in Ghana  [cached]
D. Adei,V. Osei Kwadwo,S.K. Diko
Current Research Journal of Social Science , 2012,
Abstract: The National Health Insurance Scheme (NHIS) in Ghana has been in operation since 2005 as a nationwide health financing option in the form of District Mutual Health Insurance Schemes. With the Kwabre District Mutual Health Insurance Scheme as a case study the study sought to assess; households level of satisfaction, challenges affecting the scheme, the scheme’s sustainability prospects and make recommendations to inform policy. Primary data were obtained through a household sample of 203, which was distributed through a proportionate stratified sampling technique. Interview guides were used to obtain information from 12 accredited health service providers and the scheme management. Secondary data were also acquired from the Kwabre East District Health Directorate (DHD) and the scheme’s management office. Data analysis indicated that, the scheme is substantially dependent on tax funding (93.5%). Everybody pays for the scheme through taxation (NHIL) but unfortunately the scheme excludes over 72.1% of the population it covers. There is a low internal fund generation as a factor of excessive disenrollment resulting from membership non-renewal. Based on this premise, the scheme may not be sustainable in the long run as a Mutual Health Insurance Scheme since the schemes are dependent on the collective pool of resources. It is recommended that Government should boldly implement the one-time premium on a progressive and reasonable premium affordable to all. Conscious efforts should thus be geared towards improving revenue collection from premiums through education, enforcement of subscription renewal and introduction of copayment.
Assessing Microfinance: The Bosnia and Herzegovina Case  [PDF]
AnneWelle-Strand,Kristian Kjollesdal,Nick Sitter
Managing Global Transitions , 2010,
Abstract: Microfinance is often hailed both as a tool for fighting poverty and as atool for post-conflict reconciliation. This paper explores the use of microfinancein post-civil war Bosnia and Herzegovina, assessing its resultsin terms of both goals. As it combined high unemployment witha highly educated population in an institutionally open context, Bosniaand Herzegovina provides a crucial test of the effect of microfinance. Ifunambiguous signs of success cannot be found in a case with such favorableconditions, this would raise serious questions about the potentialbenefits of microfinance. The paper draws together evidence froma series of independent reviews of microfinance in Bosnia and Herzegovina,to assess its impact in terms of economic performance, theeconomic system, social welfare and post-conflict integration. Basedon this case study, microfinance appears a better tool for dealing withpoverty than with social integration or institution building.
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