Market for 33 percent interest loans. Financial inclusion and microfinance in India.

Financial inclusion is the process of building viable institutions that provide financial services to those hitherto excluded. These may include savings, insurances, remittances, and credit. Microfinance became the most dominant method for achieving financial inclusion. However, different microfinance schools of thought recommend opposite ways for attaining financial integration. India is a particularly insightful case study due to the sheer number of people excluded from formal financial services, as well as the spectrum of actors and approaches. The aim of this article is threefold. First, defining financial inclusion, depicting its status quo in India and comparing it to its South Asian and BRICS peers using recently released data from the Global Findex database. Second, focusing on microfinance as the dominant vehicle for achieving financial inclusion by scrutinizing its definitions, contrasting its two leading "schools of thought" and analyzing the central role of its dominant group-based approach. Third, the article will examine why people opt to take micro-credit at 33 percent interest rates

Strategies for optimising financial inclusion in South Africa

An underlying premise of this study was that the formal financial sector has an important role to play in the process of assisting the development of South Africa’s disadvantaged communities, especially those living in poverty. The study explored the construct of financial inclusion and sought to understand what measures are being taken by South African financial services institutions to optimise financial inclusion. Through secondary data analysis, the study investigated instances of the construct in other geographies and sought to compare and contrast what was being done in those geographies, with what is being done in South Africa. The study concluded that while the lower segments of the market are relatively unchartered territory for South African financial services organisations, the strategies that are being employed to service these markets seem to be a combination of strategies that are being employed in other geographies around the world. Based on evidence from the analysis of the various geographies and face-to-face interviews with industry practitioners from some of the larger financial services organisations in South Africa, the study proposed some additions to the way in which product development processes are carried out within financial services.<pDissertation (MBA)--University of Pretoria, 2010.Gordon Institute of Business Science (GIBS)unrestricte

Innovations in rural and agriculture finance

Most rural households lack access to reliable and affordable finance for agriculture and other livelihood activities. Many small farmers live in remote areas where retail banking is limited and production risks are high. The recent financial crisis has made the provision of credit even tighter and the need to explore innovative approaches to rural and agricultural finance even more urgent. This set of 14 briefs clearly points out the importance of business realities faced by small farmers, including low education levels, the dominance of subsistence farming, and the lack of access to modern financial instruments. These conditions mean that new and innovative institutions are required to reach small farmers. Emerging communication technologies provide new opportunities for rural banking by reducing business costs and alleviating information asymmetries. New financing instruments, such as weather index-based insurance and microinsurance, also have great potential for managing the risks faced by small farmers. In addition, bundling financial services with nonfinancial services like marketing and extension services offers new opportunities for small farmers to increase their productivity and incomes. Finally, an enabling policy environment and legal framework, enforcement of rules and regulations, and a supportive rural infrastructure all contribute immensely to making sustainable access to finance a reality. Table of Contents: •Innovations in rural and agriculture finance: Overview by Renate Kloeppinger-Todd and Manohar Sharma •Financial literacy by Monique Cohen •Community-based financial organizations: Access to Finance for the Poorest by Anne Ritchie •Rural banking in Africa: The Rabobank approach by Gerard van Empel •Rural banking: The case of rural and community banks in Ghana by Ajai Nair and Azeb Fissha •Rural leasing: An alternative to loans in financing income-producing assets by Ajai Nair •Determinants of microcredit repayment in federations of Indian self-help groups by Yanyan Liu and Klaus Deininger •M-PESA: Finding new ways to serve the unbanked in Kenya by Susie Lonie •Biometric technology in rural credit markets: The case of Malawi by Xavier Giné •Credit risk management in financing agriculture by Mark D. Wenner •New approaches for index insurance: ENSO insurance in Peru by Jerry R. Skees and Benjamin Collier •Microinsurance innovations in rural finance by Martina Wiedmaier-Pfister and Brigitte Klein •Combining extension services with agricultural credit: The experience of BASIX India by Vijay Mahajan and K. Vasumathi •Bundling development services with agricultural finance: The experience of DrumNet by Jonathan Campaigne and Tom RauschAgricultural innovations -- Developing countries, agriculture finance, Financial crisis, microinsurance, Poverty reduction, rural banking, Rural finance, Rural households, Small farmers,

Generación de riqueza en el tercer mundo a través de la formación financiera en el entorno de los microcréditos

Tesis inédita de la Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, leída el 09-12-2021Global poverty and its relationship with financial inclusion and financial education provide the motivation for this research. Although extreme poverty has been declining for nearly 25 years, the World Bank estimates that there are still more than 800 million people that subsist on less than US 90 a day. Most of these individuals are unbanked and relay on local informal economies. Financial inclusion has been broadly recognized critical in alleviating poverty and achieving inclusive economic growth. Access to financial services is referred in at least five of the 17 Sustainable Development Goals (SDGs) set by the United Nations 2030 Agenda. Undeniably there is a close relationship between economic development and financial inclusion, however recent research suggests that having an account does not necessarily imply better financial health. Although much economic and financial literature has highlighted the importance of microfinance as a factor in development, there is also an intense debate about its effectiveness as a development tool. Some researchers even suggest that microcredit can have a negative impact on the most vulnerable...La pobreza global y su relación con la inclusión financiera y la educación financiera son la motivación de esta investigación. Aunque la pobreza extrema ha ido disminuyendo durante los últimos 25 años, el Banco Mundial estima que todavía hay más de 800 millones de personas que subsisten con menos de 1,90 dólares al día. La mayoría de estas personas no están bancarizadas y dependen de la economía informal. Es ampliamente reconocido que la inclusión financiera es fundamental para aliviar la pobreza y lograr un crecimiento económico sostenible, como demuestra que el acceso a los servicios financieros está presente en al menos5 de los 17 Objetivos de Desarrollo Sostenible (ODS) establecidos por la Agenda 2030 de las Naciones Unidas. Aunque gran parte de la literatura económica y financiera ha destacado la importancia de las microfinanzas como factor de desarrollo, también existe un intenso debate sobre su eficacia. Investigaciones recientes apuntan que tener una cuenta bancaria no implica necesariamente una mejor salud financiera e incluso sugieren que puede tener un impacto negativo en los más vulnerables...Fac. de Ciencias Económicas y EmpresarialesTRUEunpu

Financial inclusion among small agribusiness entrepreneurs in Northern Nigeria

Financial inclusion is considered an effective strategy to enhance the development of small agribusiness entrepreneurs. However, previous literature does not provide unified, comprehensive indicators and requirements that ascertain the extent of financial inclusion, the banks’ approach to implementing financial inclusion, the process of giving out financing and small agribusiness entrepreneurs’ challenges towards enhancing financial inclusion. This study identified indicators and requirements for financial inclusion, banks' approaches to implementing financial inclusion, banks' process of giving out financing, and challenges faced by small agribusiness entrepreneurs to strengthen financial inclusion in Northern Nigeria. The study used qualitative approach and purposive sampling strategy through in-depth interviews and content analysis to explore experiences of informants about financial inclusion. The study identified comprehensive indicators and requirements that determine and enhance financial inclusion. Banks implement financial inclusion by ensuring access to savings, payments, and credit. Additionally, banks promote consumer protection, financial literacy, and Know Your Customer (KYC) compliance. Islamic and conventional banks' approaches in implementing financial inclusion are the same, except in the financing process. Banks are careful in lending/financing due to challenges of borrowers' repayment capacity. However, banks follow flexible and all-inclusive means to extend lending/financing. Jaiz bank relies more on debt-based financing to enhance financial inclusion. Small agribusiness entrepreneurs face challenges of loan security, investments viability and increasing cost of financing. This study identifies banks' impact on small agribusiness entrepreneurs' inclusion and shows the function and role of banks towards the financial inclusion drive. The study increases entrepreneurs' awareness of financial services and Islamic banking. Banks may use this study to predict clients' challenges and financing needs. With this study, banks could help financial regulators to redesign strategies towards Islamic banking, credit, outreach, and financial literacy

Factors affecting the usage of banking products and services by low income and under-banked consumers

A fundamental idea of this study was that the formal financial institutions have an essential role to play in the process of assisting financial inclusion of South Africa's low income and under-banked consumers. Financial inclusion is important for consumers to have access to affordable basic financial products and services. An increase in the number of financially included consumers is important for growth of home ownership, positive savings habits among low income consumers and mitigating risks with insurance products. Consumers have access to financial products and services but are not equipped with the basic knowledge to fully benefit from the use of these financial products and services. As a result, the construct of financial inclusion and the measures being taken by South African financial institutions to optimise financial inclusion was investigated in this study. There is a broad consensus that under-banked consumers face a myriad of factors that may prevent them from having effective access and usage of banking products and services. The effective usage of banking products and services not only promotes an inclusive society but also consumers' ability to take full advantage of the benefits of having access to suitable financial products and services. The influence of these factors on the usage of banking products and services by low income and under-banked consumers was under investigation in this research study. The influence of these factors on the usage of banking products and services by low income and under-banked consumers was under investigation in this research study. To achieve this, the researcher identified a number of factors that have a relationship with usage. These include Financial Awareness, Trust, Fees, Simplicity and Appropriateness of banking products and services. Consumers' usage of banking products and services were tested using primary data collected from low income and under-banked consumers in the NMB. This study only focused on five influencing factors. The investigation of other possible factors contributing to the usage of banking products and services is necessary. Making use of a larger sample and an improved model with other pertinent influencing factors might bring to light the significant factors involved in the decisions made by consumers in the usage of banking products and services. The significant factors presented in this study reveals that of the five proposed relationships, only two were found to be significant (Financial Awareness and Appropriateness). The findings of the study show that the usage of banking products and services can be increased through increased Financial Awareness about various available banking products and services, changing the unrealised need of the consumers into a realised need for banking and providing affordable products and services for various sections of the population. Appropriateness also reported a positive significant influence on Usage. This means that consumers are likely to access their bank account at different locations. With banking institutions offering products and services that meet their needs, consumers can achieve their financial goals and improve lifestyles by doing all transactions via the bank account and having more control over their personal financial affairs. Recommendations where suggested based on the empirical results to help improve the banking institutions ways of attracting and retaining consumers to effectively use their products and services. It was recommended that banking institutions should tailor their marketing campaigns towards low income and under-banked consumers in order to improve the level of financial awareness of consumers about banking products and services they consume. Seek to improve their communications strategies by adopting techniques that effectively transmits their ideas between the banking institutions and low income and under-banked consumers. And also focus should be on the creation of innovative design systems to ensure that banking products and services will effectively address the needs of low income and under-banked consumers

The propensity to adopt mobile banking among the unbanked at the base of the pyramid in South Africa

The increasing mobile penetration rates in Africa provide an interesting opportunity to mitigate financial exclusion on the continent. Through mobile phone applications that provide an electronic store of value that sits on the mobile phone, the unbanked poor can now access accounts and initiate financial transactions on their mobile phone. The mobile phone presents a more affordable and accessible channel for transacting. The aim of the research was to determine the inclination for the unbanked at the base of the pyramid in South Africa to adopt mobile banking. In total, 100 individuals were interviewed to determine their propensity to adopt mobile banking if it were made available to them. The criteria for selection were residence in an informal settlement in Gauteng, being unbanked and having access to or ownership of a mobile phone. Graphical representations of the findings were analysed to determine the proportion of the sample that would adopt mobile banking under the various constructs. It was concluded that mobile banking had a high likelihood of being adopted by individuals at the base of the pyramid on the basis of its low cost, the convenience and security it offered, and the ease of its use. Additional factors in favour of adoption included observability and trialability. CopyrightDissertation (MBA)--University of Pretoria, 2012.Gordon Institute of Business Science (GIBS)unrestricte

Shared Value in Emerging Markets: How Multinational Corporations Are Redefining Business Strategies to Reach Poor or Vulnerable Populations

This report illuminates the enormous opportunities in emerging markets for companies to drive competitive advantage and sustainable impact at scale. It identifies how over 30 companies across multiple sectors and geographies design and measure business strategies that also improve the lives of underserved individuals