Microfinance - is a term for the practice of providing financial services to poor people.
Read this for more information:
www.cgap.org/about/microfinance.html
Good Luck!
Microfinance is making small loans to the very poor. It is generally done to encourage business development in very poor communities. It started being a significant movement with ACCION and Muhammad Yunus as two pilot projects in the 1970s. The post WWII Marshall plan included some microcredit aspects.
http://www.globalchange.com Women’s self-help groups. Microloans and microfinance schemes. Financial security. India new bank and financial institutions. Vietnam, China, Cambodia, Thailand, Africa, Asia, Latin America, Mexico. Conference keynote speaker and Futurist Dr Patrick Dixon.
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Am interested in regulation & supervision of microfinance institutions. I have been a banking regulator/supervisor/inspector for over 16 yrs. Microfinance is increasingly becoming important particularly in developing countries. As a regulator, am seeking
a rating system that will enable me compare the performance and condition of microfinance institutions.
Sure there are performance indicators and specialised firms!
This is indeed a very interesting topic in microfinance. The links below will give you an idea of the actual stage of this industry. I am sure your experience in banking is very appreciable, as long as you are ready to adapt to the micro-level world…
You will see that Fitch is already in and the first were Microfinanza (ITA), Microrate (US), Planet Rating (FR).
where can small scale bussiness operator's get loan to expand there bussiness in nigeria.
The Grameen Bank is the one that started this out in Bangladesh. They did something in Nigeria.
http://www.gdrc.org/icm/country/nigeria-women.html
Check this link.
In the US, the Small Business Administration SBA Microloan Program http://www.sba.gov/financing/sbaloan/microloans.html runs the microfinance program, with various non profits and other intermediaries working under the program in various states:
1. Loan amounts are small, averaging at $10,500. Microloan amounts may range from $1,000 to $35,000 (sometimes less, depending on the maximum amount set by the loan intermediary).
2. There are eligibility requirements, and not necessarily less strict than banks. The general requirements include some type of collateral, and the personal guarantee of the business owner. The collateral may include equipment, contracts, inventory or other property.
3. The money has to be repaid – at a given interest rate decided by the loan intermediary. According to the SBA, interest rates vary, “depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury.”
For other countries, check out how Grameen Bank operates http://www.grameen-info.org/bank/WhatisMicrocredit.htm
what are the downsides to microfinance and micro-crediting? and what are effective alternatives to microfinance?
A main disadvantage to micro-finance is that the deal is too small for the lender to devote ample time and money to doing proper due diligence. As a result, default rates by borrowers are often rather high (witness Prosper.com). Borrowers seldom if ever give lenders the full story on their situation and with a small amount at risk, it does not make sense for lenders to spend a lot of money to check out the story. When lenders get burned, they decide to stop microlending and the next round of microlending must be done by greenhorns who have no idea what they are getting into. In other words, to some extent microlending depends on an ever-increasing number of lenders in order to be successful.
As for alternatives, there probably aren't many. Microlending is a promising area and I am hopeful that sites like Prosper and Zopa can use their size to reduce the due diligence costs to a point where microlending can be profitable.
http://www.pbs.org/frontlineworld FRONTLINE/World travels to Uganda to explore the impact of microfinance and, in particular, how one San Francisco-based nonprofit is using the Web to forge a more direct connection between lenders in the U.S. and borrowers in developing countries. For more information go to http://www.pbs.org/frontlineworld
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