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An assessment of the contribution of microfinance loans to the growth of micro, small and medium enterprises (msmes) in bulawayo (2009-2013)

01 Jan 2014-Vol. 3, Iss: 5, pp 214-218
TL;DR: In this article, the authors assess the contribution of micro-finance loans to the growth of MSMEs in Bulawayo (2009-2013) using a descriptive survey design.
Abstract: Deindustrialization in Bulawayo has led to the burgeoning of the informal sector evidenced by the emergence of many MSMEs.The research sought to assess the contribution of Microfinance loans to growth of MSMEs in Bulawayo (2009-2013). The research adopted a descriptive survey design. Primary data was collected through questionnaires and interviews from MSMEs. The research finds strong evidence that the contribution of microfinance loans to growth of MSMEs is not significant. Microfinance Institutions activities in the establishment of new MSMEs is nonexistent with most MSMEs source of funding coming from savings, friends and relatives. The study recommends that Microfinance Institutions engage in extensive marketing research and outreach programmes to MSMEs .This will help them to identify specific needs and design products that are suitable and tailored made for MSMEs.
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01 Jan 2016
TL;DR: Msanya et al. as mentioned in this paper conducted a case study of the PRIDE RFW credit program for rice production in Mvomero district, Tanzania, and found that rice farmers formed groups to obtain loans to improve living standards and to support both farm and nonfarm business activities.
Abstract: FARMERS’ PERCEPTIONS OF THE PURPOSES AND CHALLENGES OF MICROFINANCE CREDIT: A CASE STUDY OF THE PRIDE RFW CREDIT PROGRAM FOR RICE PRODUCTION IN MVOMERO DISTRICT, TANZANIA By Emmanuel Balthazar Msanya The aim of this study was to assess the contribution of PRIDE RFW microfinance credit in rice production in Mvomero district, Tanzania. The study covered four different villages in the district, namely Mkindo, Dakawa, Mbogo and Dihombo. Farmer groups who are engaged in smallholder rice production and who have taken loans from PRIDE RFW were interviewed. The specific objectives of the study were: (i) To identify the main purposes for which the loan is used by farmers in rice production, and (ii) To identify challenges faced by rice farmers in acquiring loans from microfinance institutions. Data for this study were collected from farmer focus groups using a checklist of interview questions. Data were organized, coded, processed and analysed using MS Excel. The analysis was in the form of descriptive tables, charts and graphs. Results indicated that farmers formed groups to obtain loans to improve living standards and to support both farm and nonfarm business activities. Loans provided to smallholder rice farmers in the study villages made a significant contribution to rice production activities as reported by farmers. Loans were used to support land preparation and planting, fertilizer purchase, harvesting and transportation of output to market. Challenges in acquiring credit from PRIDE RFW reported by farmers included the small size of loans available, delay in loan disbursement, short repayment period, high interest rates, fines for late payment, and lack of transparency by PRIDE RFW about loan availability and credit program procedures. The perspective of PRIDE RFW staff on these issues was also reported. iii TABLE OF CONTENTS LIST OF TABLES ......................................................................................................................... vi KEY TO SYMBOLS OR ABBREVIATIONS ............................................................................ vii CHAPTER 1: INTRODUCTION ................................................................................................... 1 1.

3 citations


Cites background from "An assessment of the contribution o..."

  • ...Though there are studies indicating that there is no clear evidence that microfinance programs have positive impact (Wrenn, 2007, Duvendack et al., 2011, Nothando, 2014, Yang and Stanley, Missing), MFIs can enable the poor manage their small businesses, improve their incomes and manage risks....

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References
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TL;DR: In this paper, the authors used household level panel data from Bangladesh and found that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants, but the effect is more pronounced in reducing extreme rather than moderate poverty.
Abstract: Micro-finance supports mainly informal activities that often have low market demand. It may be thus hypothesized that the aggregate poverty impact of micro-finance in an economy with low economic growth is modest or nonexistent. The observed borrower-level poverty impact is then a result of income redistribution or short-run income generation. The author addresses these questions using household level panel data from Bangladesh. The findings confirm that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants. It also has positive spillover impact, reducing poverty at the village level. But the effect is more pronounced in reducing extreme rather than moderate poverty.

1,207 citations


"An assessment of the contribution o..." refers background in this paper

  • ...Microfinance around the world shows that a small credit to MSMEs may help them grow (Khandker, 2005; Woller& Parsons, 2002; Hossain, 1988)....

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  • ...Microfinance around the world shows that a small credit to MSMEs may help them grow (Khandker, 2005; Woller& Parsons, 2002; Hossain, 1988)....

    [...]

Journal ArticleDOI
TL;DR: In this article, the authors used household level panel data from Bangladesh and found that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants, but the effect is more pronounced in reducing extreme rather than moderate poverty.
Abstract: Micro-finance supports mainly informal activities that often have low market demand. It may be thus hypothesized that the aggregate poverty impact of micro-finance in an economy with low economic growth is modest or nonexistent. The observed borrower-level poverty impact is then a result of income redistribution or short-run income generation. The author addresses these questions using household level panel data from Bangladesh. The findings confirm that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants. It also has positive spillover impact, reducing poverty at the village level. But the effect is more pronounced in reducing extreme rather than moderate poverty.

897 citations

Book
30 Sep 2003
TL;DR: Banker to the Poor as mentioned in this paper is a book written by the founder of Grameen Bank, a bank devoted to providing the poorest of Bangladesh with minuscule loans, based on the belief that credit is a basic human right, not the privilege of a few.
Abstract: Muhammad Yunus is that rare thing: a bona fide visionary. His dream is the total eradication of poverty from the world. In 1983, against the advice of banking and government officials, Yunus established Grameen, a bank devoted to providing the poorest of Bangladesh with minuscule loans. Grameen Bank, based on the belief that credit is a basic human right, not the privilege of a fortunate few, now provides over 2.5 billion dollars of micro-loans to more than two million families in rural Bangladesh. Ninety-four percent of Yunus's clients are women, and repayment rates are near 100 percent. Around the world, micro-lending programs inspired by Grameen are blossoming, with more than three hundred programs established in the United States alone. Banker to the Poor is Muhammad Yunus's memoir of how he decided to change his life in order to help the world's poor. In it he traces the intellectual and spiritual journey that led him to fundamentally rethink the economic relationship between rich and poor, and the challenges he and his colleagues faced in founding Grameen. He also provides wise, hopeful guidance for anyone who would like to join him in "putting homelessness and destitution in a museum so that one day our children will visit it and ask how we could have allowed such a terrible thing to go on for so long." The definitive history of micro-credit direct from the man that conceived of it, Banker to the Poor is necessary and inspirational reading for anyone interested in economics, public policy, philanthropy, social history, and business. Muhammad Yunus was born in Bangladesh and earned his Ph.D. in economics in the United States at Vanderbilt University, where he was deeply influenced by the civil rights movement. He still lives in Bangladesh, and travels widely around the world on behalf of Grameen Bank and the concept of micro-credit.

845 citations

Book
01 Dec 1998
TL;DR: In this article, the authors present a handbook for the design, implementation, evaluation, and management of micro finance activities, focusing on the provision of financial intermediation and assessing the financial viability of micro-finance institutions.
Abstract: The purpose of this handbook is to bring together in a single source guiding principles and tools that will promote sustainable microfinance and create viable institutions. It provides a comprehensive source for the design, implementation, evaluation, and management of microfinance activities. The book has three parts: part one takes a macroeconomic perspective toward general microfinance issues and is primarily non-technical. Part two narrows its focus to the provision of financial intermediation, taking a more technical approach and moving progressively toward more specific (or micro) issues. Part three, the most technical part of the handbook, focuses primarily on assessing the financial viability of microfinance institutions.

772 citations

Book
01 Jan 1988
TL;DR: The Grameen Bank is a specialized financial institution in Bangladesh that was established by government order in 1983 to provide credit to the rural poor for the purpose of improving their economic condition.
Abstract: The Grameen Bank is a specialized financial institution in Bangladesh that was established by government order in 1983 to provide credit to the rural poor for the purpose of improving their economic condition...

463 citations