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dc.contributor.advisorWullschleger, Beatrix
dc.contributor.authorJankovic, Branko
dc.contributor.otherFirma: | Kontakt: | PLZ/ Ort:
dc.date.accessioned2015-09-02T07:33:32Z
dc.date.available2015-09-02T07:33:32Z
dc.date.issued2014
dc.identifier.urihttp://hdl.handle.net/11654/4848
dc.identifier.urihttp://dx.doi.org/10.26041/fhnw-2663
dc.description.abstractWe can't buy much for $2, yet one third of the world population has to survive on less than $2 a day. How can we help these people? The idea of a social business led to the development of "Microfinance" in the last couple of decades. Is this the solution to worldwide poverty? (Beitrag ist nur für FHNW Mitarbeitende sichtbar)
dc.language.isoen_UK
dc.accessRightsAnonymous
dc.subjectPoverty
dc.subjectFinancial Inclusion
dc.subjectMicrofinance
dc.subjectImpact
dc.subjectWomen Empowerment
dc.subject.ddc330 - Wirtschaft
dc.subject.ddc330 - Wirtschaft
dc.titleMicrofinance - Helpful or Deceitful?
dc.type11 - Studentische Arbeit
dc.audienceSonstige
fhnw.StudentsWorkTypeBachelor
fhnw.publicationStateUnveröffentlicht
fhnw.ReviewTypeKein Peer Review
fhnw.InventedHereYes
fhnw.ConfidentLevelStaff
fhnw.leadWe can't buy much for $2, yet one third of the world population has to survive on less than $2 a day. How can we help these people? The idea of a social business led to the development of "Microfinance" in the last couple of decades. Is this the solution to worldwide poverty?
fhnw.initialPositionThe lack of access to financial services is directly linked to poverty, so it is no surprise that there are around 2.5 billion people who don t have a formal account at a financial institution. Microfinance institutions (MFIs) provide small-scale loans, insurances and other financial services to the poor, who would not get any under normal circumstances. Since there are problems with microfinance like high interest rates, commercialization, lack of regulation etc., the long-term success of this social business model is yet to be determined.
fhnw.procedureThe main purpose of this paper is to shed some light on the question whether microfinance is helpful to the clients who claim it or if it s deceiving and causing more problems to them in the end. In pursuit of answering this question, microfinance, its industry and examples of impact measuring tools are introduced. Furthermore, client success stories, crises and views of proponents and critics are shared. The conclusion is based on a critical discussion of the findings relative to the question above.
fhnw.resultsThe main findings of the research show, that microfinance has a minimum positive impact on the clients. This is due to a number of reasons, including commercialization of the services by many MFIs, which turned to seek profit instead of act in the best interest of their clients. Many clients also lack the knowledge needed to grasp the concept of debt, which in combination with irresponsible lending causes over-indebtedness. Some of the crises that led to clients ending up worse off than before claiming microfinance services occurred due to the lack of communication, monitoring and business growth control. Furthermore, the majority of the reported client success stories are the works of selection bias, which is questionable to some. Others find women empowerment and increased medical care possibilities as positive aspects of this business. However, in order to further increase the impact of microfinance, mission drift should be minimized, regulation and transparency of the lenders increased, consumption lending reduced and economies of scale fully utilized. Finally, another key to increasing impact could lie in reconsidering the target clients the industry chooses to invest in.
fhnw.IsStudentsWorkYes


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