by the government. For instance, the microfinance banks (MFBs) provide small credit or microloans, funds transfers and other related financial services to individuals, small businesses, and organizations with low income in under-developed countries. By providing the financial products and services to the low income earners, the MFBs are able to lessen the financial burden of the poor and alleviate poverty in these countries. Furthermore, in many developing countries like Nigeria where traditional financial institutions are often reluctant to provide financial services to the poor people, the MFBs help to narrow the gap in borrowing that exists between the traditional financial institutions (commercials banks) and the poor (Al-Shami et al., 2014). 2.2.1 The Importance of Microfinance Institutions Microfinance institutions (MFI) are considered important because they provide financial products and services that have positive impact on the lives of people, particularly among the poor people in the developing countries. By providing financial products services such as saving schemes, small loans, insurance, fund transfers and remittance, the MFIs are able to help to ease not only the financial burden of the poor people but also eradicate poverty by improve their economic and social lives (Serrano-Cinca & Gutiérrez-Nieto, 2014; Strøm, D Espallier & Mersland, 2014; Bosire, Mugo, Owuor, Oluoch and Kakiya; ‟ 2014). Similarly, the study by Ahmed, Brown and Williams (2013) indicated that MFIs provided loans, insurance, funds transfers, savings and training to the poor people for the purpose of improving the lives of their borrowers. However, in the case of profit-oriented financial institutions, they could fulfill the social purpose if they adhered to a high
„double bottom line
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- Summer '17
- Muhammad Yunus