Mod+5+Microfinance+0915 - Sales for Social Impact g...

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g Sales for Social Impact Microfinance Module 5
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g Sales for Social Impact Learning Objectives • Understand how microfinance and microcredit work and the need for it • Understand some of the negatives of microfinance • Learn about some microfinance organizations • Understand the status of microfinance in Uganda
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g Sales for Social Impact Borrowing in the Developed World • Let’s say you want to start a business, but don’t have the capital to do it. Where do you go?
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g Sales for Social Impact Borrowing in the Developing World • What if you didn’t have access to a bank or other traditional lender? • What services would be unavailable to you? • Where else could you go?
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g Sales for Social Impact Banking in the Developing World In Dead Aid, Dambisa Moyo tells of two boys who found $6000 in a plastic bag while playing football in Maiduguri, Nigeria The money had been hidden by its owner, who did not have access to a formal savings account Without formal, efficient banking systems, people risk losing their money and don’t earn interest There is also a smaller pool of capital available for lending Commercial banks may be non-existent or inaccessible to many at the BOP Source: Moyo, Dambisa, Dead Aid: Why Aid is Not Working and How There Is A Better Way for Africa New York: Farrar, Straus, and Giroux, 2009 :
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g Sales for Social Impact What is Microfinance? • ― Microfinance is often defined as financial services for poor and low-income clients . In practice, the term is often used more narrowly to refer to loans and other services from providers that identify themselves as microfinance institutions (MFIs).‖ Source: CGAP Microfinance Gateway FAQs http://www.microfinancegateway.org/p/site/m/template.rc/1.26.9183/
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Sales for Social Impact Microfinance Institutions (MFIs) • Borrowers generally unsalaried (but not necessarily without income) • No collateral on loans • Methods for microfinance have been developed over the last 30 years, including – Group lending and liability – Pre-loan savings requirements – Gradually increasing loan sizes – Implicit guarantees of ready access to future loans if present loans are repaid fully and promptly. Source: CGAP Microfinance Gateway FAQs
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This note was uploaded on 03/08/2012 for the course ENGINEERIN F04 taught by Professor Irfan during the Fall '08 term at COMSATS Institute Of Information Technology.

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Mod+5+Microfinance+0915 - Sales for Social Impact g...

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