Microfinance - Unit Name development Finance Unit Code CFM 301 Assignment The impact of microfinances to economic growth and development of a country

Microfinance - Unit Name development Finance Unit Code CFM...

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Unit Name: development Finance Unit Code: CFM 301 Assignment: The impact of microfinances to economic growth and development of a country; stating the measures the government should put in place to manage MFI’s towards this goal.
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Introduction Microfinance, also known as microcredit, has emerged as a movement in Kenya and in the larger part of the world. There has been unprecedented growth of Microfinance NGOs in this country over the past two and a half decades. Kenya can be considered the best concept of Microfinance. This country provides models of recognised global significance in several aspects of Microfinance, viz., scale of operation, modes and practices of Microfinance, wider financial services, and poverty alleviation. The experience of Kenya is increasingly being replicated in many developing countries. The sector is now in transition in terms of process and operational strategies. This Assignment discusses growth of the sector, its impact and some upcoming issues including the challenges. The discussion is focused on the impact of microfinances to economic growth and development of a country and it will state the measures the government should put in place to manage MFI’s towards this goal. . Microfinance Institutions main features Microfinance Institutions, in simple terms, can be described as institutions that oferr small loans to poor households to foster self-employment and income generations. The loans largely go to rural landless, disadvantaged women and marginal farmers who depend largely on selling their labour. The terminology of Microfinance was originally known as microcredit and has undergone a change in recent time. Microfinance Institutions generally involves the following features: 1* Small loans, for both working capital and assets 2* Collateral free, substituted by group guarantees or compensatory savings
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3* Access to repeat and larger loans 4* Intensive supervision and close monitoring 5* Secure savings products 6*
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