EXITING POVERTY THROUGH SELF-EMPLOYMENT: THE GRAMEEN MODEL AND ROTATING CREDIT ASSOCIATIONS AS ALTERNATIVE STRATEGIES

2021 ◽  
pp. 2150012
Author(s):  
IVAN LIGHT
Keyword(s):  
Informal Sector ◽  
Financial Resources ◽  
Poor People ◽  
Resource Base ◽  
Alternative Strategies ◽  
Lower Tier ◽  
Self Employment ◽  
Credit Associations ◽  
Minimal Resource

Self-employment in the informal sector keeps poor people alive, but it rarely enables them to exit poverty. To exit poverty through self-employment, poor people require monetary and non-monetary resources which they overwhelmingly lack. To escape this dilemma, the owners of survivalist business firms need to band together in order to assemble a minimal resource base on the strength of which they can together upgrade their partnership. Because resources are scarce in poverty populations, this task is exceptionally hard to accomplish. Rotating credit and savings associations (ROSCAs) can enable individuals to exit poverty through self-employment, but ROSCAs only work in the most-resourced, upper tier of a poverty population. In the lower tier, Grameen model banks inject organizational, educational, and financial resources that enable impoverished individuals to exit poverty by upgrading a survivalist business.

scholarly journals ASSESSING ECONOMIC IMPACT OF MICROCREDIT SCHEME: A REVIEW OF PAST STUDIES ON AMANAH IKHTIAR MALAYSIA (AIM)

2020 ◽  
Vol 5 (1) ◽  
pp. 124-142
Author(s):  
Noor Syafinas Muda ◽  
Ku 'Azam Tuan Lonik
Keyword(s):  
Economic Impact ◽  
Small Businesses ◽  
Economic Status ◽  
Empirical Studies ◽  
Well Being ◽  
Poor People ◽  
Self Employment ◽  
Economic Impact Assessment ◽  
The Poor ◽  
Microfinance Institution

Background and Purpose: Microcredit scheme was introduced to provide credit facilities for poor people to start a business activity. Microcredit creates income-generating self-employment activities that allow poor people to venture into small businesses and achieve economic independence. The scheme has been recognised as a successful tool to uplift the socio-economic status among the poor. Amanah Ikhtiar Malaysia (AIM) is the largest microfinance institution in Malaysia and therefore, its impact on the beneficiaries is crucial to be studied. This paper aims at reviewing the economic impact of AIM based on the existing literature.   Methodology: Four electronic databases, which are Scopus, Science Direct, Springer and Ebscohost were used to search the literature. Subsequently 118 articles were generated from this search. However, only 13 articles which met the selection criteria were analysed. We selected only empirical studies that focused on the economic impact of AIM.   Findings: Results of the review showed that income has dominated the economic impact assessment followed by asset, economic vulnerability and spending. Low concentration on the indicators other than income should be noted especially on spending as it provides a clear evidence that the recipients enjoy the economic well-being in terms of consumption expenditure.   Contribution: This review reveals that microcredit has a great potential to uplift the economic status of the poor.   Keywords: Amanah Ikhtiar Malaysia, asset, economic impact, income, microcredit.   Cite as: Muda, N. S., & Tuan Lonik, K. A. (2020). Assessing economic impact of microcredit scheme: A review of past studies on Amanah Ikhtiar Malaysia (AIM).  Journal of Nusantara Studies, 5(1), 124-142. http://dx.doi.org/10.24200/jonus.vol5iss1pp124-142

FINANCIAL INCLUSION THROUGH MICRO FINANCE

2021 ◽  
pp. 1-4
Author(s):  
P. Nagarajan
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Rural Areas ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Poor People ◽  
Resource Base ◽  
Income Groups ◽  
Low Income Groups

Finance has become an essential part of an economy for development of the society as well as economy of nation. World leaders are embracing nancial inclusion at an accelerating pace, because they know that an inclusive nancial system that responsibly reaches all citizens is an important ingredient for social and economic progress for emerging markets and developing countries. Despite the political tailwind, half of the working-age adults globally – 2.5 billion people – remain excluded from formal nancial services. Instead, they have to rely on the age-old informal mechanisms of the moneylender or pawnbroker for credit or the rotating savings club and vulnerable livestock for savings. The pandemic has had a momentous impact on economies and societies around the world. At the same time, it has shown that, with the right approach, it is possible to protect and safeguard the economy. . Through Financial inclusion we can achieve equitable and inclusive growth of the nation. Financial inclusion stands for delivery of appropriate nancial services at an affordable cost, on timely basis to vulnerable groups such as low income groups and weaker section who lack access to even the most basic banking services. It helps in economic development as it widens the resource base of the nancial system by developing a culture of savings among large segment of rural population. Further, nancial inclusion protects their nancial wealth and other resources in exigent circumstances by bringing low income groups within the perimeter of formal banking sector. Financial inclusion engages in including poor people in the formal banking industry with the intention of securing their minimal nances for future purposes. Micronance has become a medium of extending nancial services to unbanked sections of population. Micronance is banking the unbankables, bringing credit, savings and other essential nancial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufcient collateral. In a country like India with almost 30% (more than 360 million) people still below poverty line and according to latest census gures, more than 70% or 840 million people living in rural areas with little or no access to formal banking and other nancial services, micronance has a big role to play in order to bridge this gap. The Micro Finance Institutions occupies key position in nancial inclusion through micro nance where the exclusion. In developing countries, the growth of micronance institutions (MFIs) which specically target low income individuals are viewed as potentially useful for promotion of nancial inclusion. Even though MFIs at present, mainly offer only credit products; as they grow, they are likely to expand their product range to include other nancial services.

scholarly journals Monitoring the Development Strategies of the United Territorial Communities of the Kharkiv Region in the Context of the Use of Identification Tools

2020 ◽  
Vol 24 (1) ◽  
pp. 164-170
Author(s):  
I. Popova ◽  
◽  
N. Demchenko ◽  
A. Lebedin ◽  
◽  
...  
Keyword(s):  
Development Strategy ◽  
Agricultural Land ◽  
Financial Resources ◽  
Capital Expenditures ◽  
Social Infrastructure ◽  
Resource Base ◽  
Business Entities ◽  
Fierce Competition ◽  
Management Staff ◽  
The Impact

Annotation. Introduction. Decentralization of power requires the creation of united territorial communities, which should develop strategies for their own development, with the main directions of society development, tasks, prospects for improving the quality of life of the residents of community. In conditions of fierce competition for investment resources, territorial communities, are united, while developing strategies, they must show the peculiarity of their community – local identity, which is the basis for positioning each community. Purpose. The purpose of the article is, monitoring strategies for the development of united territorial communities in the context of the use of identification tools on the example of Kharkiv region. Results. To assess the impact of strategy results on life communities should constantly monitor the effectiveness of implemented programs and projects. The article monitors the development strategy of the united territorial communities of Kharkiv region and identifies the features of each community that must be taken into account in conditions of fierce competition for investment resources, as well as identifies tools to form a positive image of united territorial communities Conclusions. The region has a fairly good education rating of the united territorial communities, which was influenced by the high rates of their population. All the communities of the Kharkiv region, which have been functioning for more than one year, have a stable growth of the resource base, and the vast majority of them do not receive subsidies, on the contrary, they pay a significant reverse subsidy. At the same time, they are also characterized by an increase in the share of expenditures for the maintenance of the management staff in financial resources and a sharp dynamics of capital expenditures, which does not correlate with the growth of budget revenues. At the same time, they are also characterized by an increase in the share of expenditures on the maintenance of the management staff in financial resources and abrupt dynamics of capital expenditures, which does not correlate with the growth of budget revenues. Based on the results, the main identification tools are identified, namely area, population (including demographic structure), income and expenditure level, financing structure, structure of business entities by type of activity and income level, number of social infrastructure facilities, the level of employment and unemployment in the community, the share of agricultural land in the region; the number of enterprises in the region by type of activity; unique name; minerals; the share of certain industries in the region; favorable conditions for tourism development (green, medical, hunting, etc.). The definition of these instruments is the basis for assessing the socio-economic development of society, investment attractiveness. Keywords: united territorial community; strategy, monitoring; tools; identification.

scholarly journals A Defense of Local People Working as Souvenir Vendors and Its Relation with the Female Identity in Kintamani Tourism Area, Bali

2018 ◽  
Vol 30 (2) ◽  
pp. 109
Author(s):  
Ni Made Ary Widiastini ◽  
I Wayan Ardika ◽  
I Gede Mudana
Keyword(s):  
Informal Sector ◽  
Female Identity ◽  
Poor People ◽  
New Paradigm ◽  
Literature Study ◽  
Equal Distribution ◽  
The People ◽  
Family Economy ◽  
The Family ◽  
The Village

Souvenir vending is one of the jobs done by poor people in tourist areas such as Batur Tengah Village or better known as Penelokan, Kintamani, Bangli Regency, Bali to make their family survive. However, the souvenir vendors’ existence is not only considered by tourism businesses as unacceptable, but it is also regarded as a major factor that hampers the development of tourism in Kintamani. In fact, the Bali Local Regulation No. 2 of 2012 on Cultural Tourism explicitly emphasizes that the development of Bali’s tourism is aimed to encourage an equal distribution of business opportunities and to obtain maximum benefits for the welfare of the community. Therefore, this study was aimed to determine the reasons why the informal sector (souvenir vending) is used as the basis of the family economy, what is the practice of souvenir vending which has become the basis of the family economy, and also what is the struggle for vendor space in the Kintamani tourism area and its relation with the female identity. In this study, several techniques were used such as observations, interviews, and literature study to collect data. Research results show that the people in the Batur Tengah village choose to work as souvenir vendors because of their limited economic capital, education, skills, and time due to other life burdens, especially for those who are already married. In the Kintamani tourism area, souvenir vendors have to interact with various parties which certainly involves a capital struggle because each party has a different interest. As a famous international tourism area which has become a global Geopark, this area is highly contested for its economic, social, cultural, political, and environmental values. Researchers found a new paradigm that shows souvenir vending to be one form of entrepreneurship in a tourism field which is responded to by the people as a multi-purpose industry. The utilization of the informal sector is considered a family economic base by women in the village of Batur Tengah. Married woman are obligated to provide for their families hence they struggle as souvenir vendors in the middle of the tourism competition which has become more strict and less accommodative due to the new government policy. In practice, the community is very obedient to the elite community leaders who are considered as patrons, both by the men and women vendors. Other options to support their families are now very few and becoming less as the tourism areas are becoming more popular.

scholarly journals Informal Economy and Poverty in Urban Nepal

2018 ◽  
Vol 41 (3-4) ◽  
pp. 12-24
Author(s):  
Dipak Bahadur Adhikari
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Rural Areas ◽  
Urban Areas ◽  
Structural Changes ◽  
Labour Force ◽  
Urban Expansion ◽  
Poor People ◽  
Active Population ◽  
Employment Education

Informal sector plays a crucial role in employing a significant part of the economically active population of Nepal. The Nepal Labour Force Survey(NLFS) - 2017/18 has estimated around 62 percent of people to be currently employed in the informal sector. It is estimated that there are 84.6 percent of the currently employed who are informally employed in all industries as compare to formal employment 15.4 percent in Nepal. Employment is the main source of income of poor people which is still considered to be the most effective vehicle to take them out of poverty. People of rural areas are gradually coming to urban areas. So, economic growth and structural changes are increasingly linked to urbanization process. More people will live in urban settlements than in rural areas. Metropolitan cities of Nepal like Lalitpur can offer the lure of better employment, education, and healthcare and they also contribute disproportionately to the economy of the country. However, rapid urban expansion is often associated with poverty and rapid growth of informal sector urban area.

scholarly journals Developing Labour Market Information System for Informal Sector in Pakistan

1994 ◽  
Vol 33 (4II) ◽  
pp. 1357-1370 ◽  
Author(s):  
Sabur Ghayur
Keyword(s):  
Labour Market ◽  
Informal Sector ◽  
Urban Areas ◽  
Labour Force ◽  
Financial Resources ◽  
Easy Access ◽  
Rural And Urban Areas ◽  
Rural And Urban ◽  
The Unemployed ◽  
Unemployment Problem

The informal sector (IFS) is seen as having the potential to adequately respond to the growing unemployment problem in Pakistan. Easy access, and low skill and investment requirements of a variety of activities in this sector correspond well with the stock and annual additions to the labour force and the available financial resources. This sector is still absorbing a large proportion of the labour force in rural and urban areas. It is also contributing significantly towards developing the skill base of the labour force.1 (see Annex Tables I-III.) Bu~ the fact remains that its development is rather haphazard with the result that the potential which this sector offers remains poorly utilised. Firstly, adequate dis aggregated information on this l sector is stilllackillg. This often results in the undertaking of activities, but, without taking cognisance of market conditions and availability of adequate consumer demand. A number of -such activities, hence, face the risk of failure at the outset.. Secondly, there is a lack of disaggregated information on the stock of the labour force and annual additions to it, and also on employment patterns. This affects support activities, if any, as adequate feedback is not forthcoming on market con,ditions, new entrants into the labour market and the unemployed. Availability of disaggregated information is necessary for undertaking support and development activities for this sector.

The Informal Sector and Zambia's Employment Crisis

1980 ◽  
Vol 18 (3) ◽  
pp. 411-425 ◽  
Author(s):  
David M. Todd ◽  
Christopher Shaw
Keyword(s):  
Informal Sector ◽  
Educational System ◽  
Urban Areas ◽  
Labour Force ◽  
National Development ◽  
Reliable Information ◽  
Self Employment ◽  
Wage Employment ◽  
The Unemployed

Late in 1979 the Zambian Government unveiled its Third National Development Plan which will guide policies until the year 1984, and this implies that problems of unemployment, particularly in urban areas, will be partly overcome by an expansion of self-employment possibilities.Such was the enthusiasm for the new initiative that the absence of reliable information surrounding it was largely ignored. This article attempts to provide relevant data concerning a number of issues which will be vital in implementing any measures to encourage self-employment in the so-called ‘informal sector’ of the Zambian economy. In particular we shall endeavour to quantify the likely flows into the labour force, particularly from the educational system, the possible growth of formal wage employment in urban areas, and the current size and composition of the informal sector. Finally, conclusions are drawn concerning the possible rôle of this sector in absorbing the unemployed in the plan period.

scholarly journals Pemodelan Kemiskinan Pada Kabupaten/Kota Di Provinsi Jawa Timur Tahun 2015 Dengan Pendekatan Model Regresi Spasial

2018 ◽  
Vol 11 (2) ◽  
pp. 1-8
Author(s):  
Siti Munadhiroh ◽  
Wara Pramesti
Keyword(s):  
Drinking Water ◽  
Informal Sector ◽  
Spatial Regression ◽  
Participation Rate ◽  
Water Sources ◽  
School Enrollment ◽  
Predictor Variables ◽  
Poor People ◽  
Spatial Error ◽  
Drinking Water Sources

Regression is a technique that can be used for response variables with one or more predictor variables. The purpose of this study is to model poverty in districts / cities in East Java 2015 with a spatial regression approach. In 2015, poverty in East Java has increased compared to the previous year. Therefore it is necessary to identify the factors that affect poverty. The variables used are the percentage of poor population as the response variable and the predictor variables include last elementary school education (X1), school participation rate 7-12 years (X2), informal sector workers (X3), open unemployment rate (X4), household using bamboo walls (X5), and household users of inadequate drinking water sources (X6). The result of this research is the best model to model the percentage of poor people is Spatial Error Model (SEM) with spatial weighting matrix Queen Contiguity and obtained AIC value 191,02 and R2 equal to 77,47%. Factors that have significant effect on the percentage of the poor are school enrollment (X2), informal sector workers (X3), household users of inadequate drinking water sources (X6) and there is an error dependency on one location to another.

scholarly journals Financial Resources Management in Commercial Banks: Evidence From Latvia

2020 ◽  
Vol 12 (1) ◽  
pp. 369
Author(s):  
Natalia Konovalova ◽  
Aina Caplinska
Keyword(s):  
Commercial Banks ◽  
Equity Capital ◽  
Financial Resources ◽  
Maximum Efficiency ◽  
Banking Supervision ◽  
Resource Base ◽  
Resources Management ◽  
Use Of Resources ◽  
Banking Activity ◽  
Two Sides

Financial resources management issues are relevant for each commercial bank. Those banks that operate with an excess of free financial resources lose profitability, but the liquidity of such banks is quite high. Other banks that conduct aggressive policy aiming to place all the available resources with maximum efficiency, are forced to seek solutions to the problem of locating additional liquid funds, in order to ensure timely fulfilment of liabilities. In this article, the authors analyze the state of the resource base of Latvian commercial banks, identify reserves for increasing the efficiency of banks and propose a methodology for optimizing the attraction and placement of resources in commercial banks. Since bank resources management involves two interrelated issues – equity capital management and management of liabilities (attracted and borrowed funds), the authors successively consider two sides of this process. Besides, the process of equity capital and liabilities management is inseparably linked with active transactions, i.e. with the use of resources, therefore the research also focuses on the interrelation between passive and active transactions of the bank and on the development of a methodology for optimizing the attraction and allocation of bank resources. The purpose of the research is to analyse passive operations in Latvian banks, to assess the formation of their resource base and its management, as well as to work out some recommendations on how to update the management of the combined (aggregate) resource base in Latvian commercial banks. The authors have put forward a following hypothesis: the decline in financial resources leads to an increase in the bank's efficiency, and vice versa, the increase in financial resources leads to an inefficient redistribution of funds in the banking activity. During the study, this hypothesis was justified. The theoretical and methodological basis for the research includes scientific works by Latvian and foreign authors, special economic literature, Latvian legislation, regulations of the Bank of Latvia and of the Financial and Capital Market Commission, recommendations of the Basel Committee on Banking Supervision, EU Directives. The authors used such research methods as economic analysis, method of comparison, economic grouping, statistical methods, etc. The application of the proposed methodology for optimizing the attraction and placement of resources is considered on the example of Latvian commercial banks.

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