scholarly journals Co-Production Related To Business Counselling in the Microfinance Sector as a Demonstration of Social Cooperation: An Interpersonal Relationship Approach

2020 ◽  
Vol 4 (2) ◽  
pp. 56-66
Author(s):  
Ruwan Abeysekera
Keyword(s):  
Interpersonal Relationships ◽  
Low Income ◽  
Financial Services ◽  
Interpersonal Relationship ◽  
Organizational Factors ◽  
Management Training ◽  
Business Development ◽  
Sri Lankan ◽  
Microfinance Institutions ◽  
Counseling Intervention

Microfinance Institutions (MFIs) provide services such as microcredit, savings, insurance, and Business Development Services (BDS) to low-income people in order to start new businesses and expand existing businesses. MFIs cater to micro-enterprises. A microenterprise is defined as an owner-managed business that has fewer than 10 employees. The studies show that microenterprises not only need microcredit but also BDS in order to grow their businesses. This study focuses on BDS. BDS are non-financial services such as management training, vocational training skills, marketing assistance, and technology access provided to owner-managers by MFIs. MFIs could provide BDS to owner-managers/clients using business counseling. A good relationship between the counselor and the client can be considered a defining feature of any successful counseling intervention. This interpersonal relationship enhances the co-production of BDS in counseling. Therein, the objectives of this study are; to identify the factors that enhance the interpersonal relationship between the counselor and the client in microfinance settings that result in enhanced co-production, to identify how interpersonal relationships enhance co-production, and to understand how organizational factors affect interpersonal relationships. The multiple case study method was used to conduct the study and six (6) Sri Lankan Microfinance Institutions (MFIs) were chosen as cases and data were collected by holding in-depth interviews. Findings show that factors such as the expertise of the counselors, social interaction, similar attitudes, intensity of contacts, and power distance influence the relationship between the counselors and the clients. As a result of the enhanced interpersonal relationships between counselor and client, parties exchange personal and communal favors thereby further enhancing co-production as well as improving the provision of information by clients. The findings further reveal that interpersonal relationships could be affected by organizational factors such as the type of MFI and type of linkages. Therefore, the findings of this study will enable MFIs to improve the counseling intervention and will further contribute to the microfinance knowledge and practice domains. Keywords: interpersonal relationship, co-production, counseling, microfinance, business development services (BDS).

scholarly journals Co-production in BDS: The evidence from the Sri Lankan Microfinance Sector

2020 ◽  
Vol 4 (3) ◽  
pp. 63-71
Author(s):  
Ruwan Abeysekera
Keyword(s):  
Financial Services ◽  
Business Development ◽  
Sri Lankan ◽  
Microfinance Institutions ◽  
Case Study Method ◽  
Knowledge Domain ◽  
Business Training ◽  
Client Retention ◽  
Number Of Factors

Microfinance Institutions (MFIs), in addition to the provision of microcredit, also provide business development services (BDS) to owner managers in order to develop micro enterprises. BDS are non-financial services such as business training and access to information that help owner managers of microenterprises to develop businesses. In this respect, counsellors and trainers in MFIs co-produce BDS with owner managers. Co-production is the joint efforts of two parties, who together determine the output of their collaboration. The objective of this study therefore is to examine how co-production works in a BDS setting. A multiple case study method was used to carry out the study. Six MFIs were selected as cases and in-depth interviews were held with counsellors, trainers and managers to collect the data. The findings reveal that the expertise of counsellors, trainers and owner managers are the inputs for co-production. The outputs of co-production are twofold: MFI specific outputs and owner manager specific outputs. While MFI specific outputs are identified in better loan repayments rates, enhanced client satisfaction, and increased client retention, the owner manager specific outputs are denoted by better business knowledge, better sales, and profits. MFIs use counselling and training as modalities to co-produce BDS. There are a number of factors that affect the variability in coproduction including the readiness of counsellors and trainers, with a number of BDS provided under each modality. Therein, the findings of this study are beneficial to microfinance practitioners and policy makers. Furthermore, the findings also contribute to the knowledge domain of microfinance. Keywords: business development services (BDS), co-production, microfinance, case study method.

scholarly journals MODEL OF BUSINESS ACTIVITIESS OF MICROFINANCE INSTITUTIONS IN INDONESIA

2017 ◽  
Vol 2 (2) ◽  
pp. 326
Author(s):  
Etty Mulyati ◽  
Kartikasari Kartikasari ◽  
Rai Mantili ◽  
Nun Harrieti
Keyword(s):  
Financial Institutions ◽  
Low Income ◽  
Financial Services ◽  
Limited Liability ◽  
Business Development ◽  
Community Empowerment ◽  
Microfinance Institutions ◽  
For Profit ◽  
Consulting Services ◽  
Purpose Of Business

Micro Finance Institutions (LKM) as non-bank financial institutions, are growing very rapidly in Indonesia. A very large number and scope of business in villages/sub-districts and sub-districts or districts can play a role in an inclusive financial program. The existence of LKM operation much help expand employment and improve the welfare and improving the economy and productivity of the people, especially low-income communities. The problem is how to model the business activities of LKM in Indonesia. This research will use normative juridical approach method, with analytical descriptive research specification. In an effort to provide financial services, which are intended for low-income communities and do not have access to bank financial institutions. LKM can bridge the problems of micro business access to capital is needed in business development. LKM has a different character with the other financial sector businesses, because it is not solely intended for profit. LKM business activities can be done in a conventional or sharia, includes loan/financing for micro enterprises for capital needs in business development, and management of deposits in an effort to bring awareness to the community's fond of saving, besides that LKM also provide consulting services for the purpose of business development community empowerment. To provide legal certainty for the LKM service user community, LKM institutions are regulated in LKM Laws, according to the law the LKM must be a legal entity of the Cooperative or Limited Liability Company Fostering, regulating, and supervising and licensing of LKM is performed by the Financial Services Authority (OJK). 

scholarly journals Examining Counsellor Expertise: Evidence from the Sri Lankan Microfinance Sector

2020 ◽  
Vol 4 (1) ◽  
pp. 57-67
Author(s):  
Ruwan Abeysekera
Keyword(s):  
Low Income ◽  
Financial Literacy ◽  
Organizational Factors ◽  
Business Development ◽  
Experiential Knowledge ◽  
Microfinance Institutions ◽  
Systematic Analysis ◽  
Record Keeping ◽  
Business Knowledge ◽  
Reliable Mechanism

Posited in the context of the exacerbating conditions of the economic crisis, the shortage of financial resources in the small and medium-sized enterprise market, and the low standard of living of the population in a number of countries, microfinancing is one of the effective tools to stimulate entrepreneurship. Microfinancing is the issuance of small loans and other services, such as business development services (BDS), which also comprise components of financial literacy, business registration, market linkages, thereby serving as a reliable mechanism to support low-income individuals to start and grow their businesses and to alleviate poverty in the country. Microfinance Institutions (MFIs) use innovative techniques, such as group lending and gradually increasing loan sizes in order to provide these services. The systematic analysis of the existing scientific literature on microfinance revealed the lack of comprehensive research on the significance of counselor expertise in the provision of BDS. Thus, the objectives of the present study were to understand the meaning of counselor expertise, to see how counselor expertise could help owner-managers in different areas of their businesses, and to examine how the organizational factors affect the expertise of the counselors. A case study method was used to carry out the study. Accordingly, six MFIs were selected as cases, and a microfinance manager, a counselor, and three owner-managers/clients from each MFI were interviewed to collect the data. The findings show that counselor expertise is twofold: business knowledge and experiential knowledge. It was evidenced that, while the business knowledge of counselors helps owner-managers in record keeping, business plan preparation, and financial literacy, the experiential knowledge helps owner-managers in networking, business linkages, and different industries. The findings also reveal that the type of MFI, the type of linkage, and the counsellor selection method influence the expertise of the counselors. Therein, the findings are useful both to the practice and the knowledge domains in the microfinance setting. Keywords: counseling, expertise, microfinance, business knowledge, experiential knowledge, business development services.

scholarly journals Evaluating the Impact of Microfinance for Women in Albania

2016 ◽  
Vol 4 (2) ◽  
pp. 233
Author(s):  
Oltiana Muharremi ◽  
Filloreta Madani ◽  
Erald Pelari
Keyword(s):  
Social Influence ◽  
Low Income ◽  
Financial Services ◽  
Poverty Alleviation ◽  
Empirical Investigation ◽  
Social Value ◽  
Microfinance Institutions ◽  
The Poor ◽  
The Impact ◽  
Micro Enterprises

<p class="Default"><em>Microfinance is defined as any activity involving the offering of financial services such as loans, savings and insurance to individuals with low income.</em><em> </em><em>Creating social value includes reducing poverty and having a better impact to improve living conditions through capital for micro-enterprises; insurance and savings deposits for reducing risk and boosting consumption. Worldwide microfinance actors promote access to basic financial services by developing new tools, a variety of products and the adoption of an integrated banking access.</em></p><p class="Default"><em>Initially, microfinance was largely gender neutral: it sought to provide credit to the poor who had no assets to pledge as collateral. It quickly emerged, however, that women invested their business profits in ways that would have a longer-lasting impact on their families and communities. Consequently women became fundamental to the success of the microfinance model as a poverty alleviation tool. The purpose of this article is to examine the impact of microfinance loans in improving the lives of women borrowers, as well as in strengthening their social influence and the microcredit impact in promoting savings. This study is based on an empirical investigation of 384 structured questionnaires and surveys directed at microfinance institutions and their clients in the regions of Vlore and Fier, Albania.</em></p>

scholarly journals The Islamic Microfinance System And Its Ultimate Impact On The Poor In Bauchi Metropolis In The Context Of Socio-Economic Challenges

2021 ◽  
Vol 5 (1) ◽  
pp. 95-101
Author(s):  
Hashim Sabo Bello ◽  
Shamsuddeen Abubakar ◽  
Sunusi Abdulkadir Fateh
Keyword(s):  
Social Services ◽  
Low Income ◽  
Financial Services ◽  
Poor People ◽  
Microfinance Institutions ◽  
Islamic Microfinance ◽  
And Gender ◽  
High Level ◽  
Financial Transactions ◽  
The Impact

One of the conditions for providing social services to the population, reducing the differentiation of their incomes, as well as reducing poverty is to provide equal access to financial services for all segments of the population. Despite high unemployment and a significant number of poor people, only about a few thousand Nigerians today use Islamic microfinance services. The main purpose of this study is to study the impact of the Islamic microfinance system on the financial situation of the population. The study is based on the principles of the theory of positivism. Methods of deduction, statistical analysis, and survey served as methodological tools. The authors of the article developed a structured questionnaire, the analysis of which allowed to analyze the attitude of citizens to Islamic microfinance services. A representative sample of citizens of the metropolis Bauchi with different levels of wealth, age and gender was selected for the study. According to the results of the survey, the development of special microcredit programs for low-income people allowed to finance the start of their own business, thus providing their own and household members’ employment. The main factors hindering the development of microfinance in Muslim countries are the high level of non-repayment of borrowed funds, imperfect infrastructure, the presence of Sharia bans on certain types of financial transactions. The results of the study showed the need for an active information campaign aimed at explaining the benefits of using macro-financial services and their accessibility for low-income citizens, as well as expanding the network of microfinance institutions throughout the metropolis. These measures will create conditions for the development of small business in the country, and as a consequence reduce poverty and reduce the number of unemployed in the country.

scholarly journals The Akiba Mashinani Trust, Kenya: a local fund’s role in urban development

2018 ◽  
Vol 30 (1) ◽  
pp. 53-66 ◽  
Author(s):  
Jane Weru ◽  
Omondi Okoyo ◽  
Mary Wambui ◽  
Patrick Njoroge ◽  
Jacinta Mwelu ◽  
...  
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Informal Settlements ◽  
Wealth Accumulation ◽  
Microfinance Institutions ◽  
Social Fabric ◽  
Financial Products ◽  
Community Project ◽  
Low Income Groups ◽  
Basic Infrastructure

This paper describes the funding and financial services provided by the Akiba Mashinani Trust (AMT) to support the Kenyan Homeless People’s Federation (Muungano wa Wanavijiji). Muungano is a federation of autonomous savings groups with over 60,000 members from informal settlements across Kenya. Savings are critical because they enable wealth accumulation, demonstrate the capacity of the community to repay loans and hence leverage additional resources, and build social capital among members. AMT is able to use these savings as seed capital for revolving funds at the community, city and national scales. The funds offer informal settlers a range of financial products, including community project loans, which allow savings groups to finance social housing, sanitation and basic infrastructure in an affordable way. Therefore, unlike formal banking and microfinance institutions, AMT positions its financial services within a broader effort to improve the physical and social fabric of urban informal settlements. The experiences of Muungano and AMT demonstrate the catalytic impact of establishing appropriate financial services geared towards low-income groups – and crucially, how the savings of low-income people can leverage government resources to achieve more inclusive cities.

scholarly journals Predicting The Impact of Commercialization Factors on The Social Mission of Islamic Microfinance Institutions for Muslim Community

2020 ◽  
Vol 6 (1) ◽  
pp. 14
Author(s):  
Hesi Eka Puteri
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Quantitative Research ◽  
Social Performance ◽  
Microfinance Institutions ◽  
Muslim Community ◽  
Social Mission ◽  
The Social ◽  
Community Banking ◽  
The Impact

<p class="abstrak">As a community banking operating in Islamic principles, Islamic rural banks are faced with two performance targets namely financial performance and social performance which are both interrelated. This study examined the impact of commercialization factors covering profitability, regulation, and competition on the social performance of Islamic rural banks. This study was quantitative research based on a survey on six units of Islamic rural banks in West Sumatera province of Indonesia from 2012 to 2018. Data collected from the publication of financial services authority and other financial documents at Islamic rural banks then analyzed with panel data regression. The findings of this research showed that profitability and competition influenced social performance. Meanwhile, there was no regulation’s impact on social performance.  Regulatory factors that were initially expected to strengthen the social responsibility mission of Islamic rural banks, did not stimulate the increase of social performance. This study reveals the importance of the commercialization factor in improving the social performance of Islamic rural banks by increasing the social benefits through providing financial services for the low-income Muslim community.</p><p class="abstrak" align="left"> <em>Sebagai sebuah community banking yang beroperasi dalam prinsip-prinsip Islam, BPR Syariah dihadapkan pada dua target kinerja yaitu kinerja keuangan dan kinerja sosial yang keduanya saling terkait. Penelitian ini bertujuan untuk menguji dampak dari faktor-faktor komersialisasi yang meliputi profitabilitas, regulasi dan kompetisi terhadap kinerja sosial BPR Syariah. Penelitian ini menggunakan pendekatan kuantitatif berdasarkan survei pada enam unit BPR Syariah di provinsi Sumatera Barat Indonesia dari tahun 2012 hingga 2018. Data dikumpulkan dari publikasi Otoritas Jasa Keuangan dan dokumen keuangan lainnya di BPR Syariah kemudian dianalisis dengan regresi data panel. Hasil penelitian ini menunjukkan bahwa profitabilitas dan persaingan berpengaruh terhadap kinerja sosial, sedangkan regulasi tidak berpengaruh terhadap kinerja sosial. Faktor regulasi yang semula diharapkan memperkuat misi tanggung jawab sosial BPR syariah, ternyata tidak merangsang peningkatan kinerja sosial. Studi ini mengungkap akan pentingnya faktor komersialisasi dalam meningkatkan kinerja sosial BPR syariah dengan meningkatkan manfaat sosial melalui pemberian layanan keuangan untuk masyarakat muslim berpenghasilan rendah.</em></p><p class="abstrak"> </p>

scholarly journals Stochastic model of microcredit interest rate in Morocco

2016 ◽  
Vol 6 (4) ◽  
pp. 268-273 ◽  
Author(s):  
Ghita Bennouna ◽  
Mohamed Tkiouat
Keyword(s):  
Interest Rate ◽  
Stochastic Model ◽  
Interest Rates ◽  
Low Income ◽  
Financial Services ◽  
Banking System ◽  
Well Being ◽  
Microfinance Institutions ◽  
Social Mission ◽  
The Interest Rate

Access to microcredit can have a beneficial effect on the well-being of low-income households excluded from the traditional banking system. It allows this population to receive affordable financial services to help them to meet their needs and to improve their living conditions. However to provide access to credit, microfinance institutions should ensure not only their social mission but also commercial and financial mission to enable the institution to perpetuate and become self-sufficient. To this end, MFIs (microfinance institutions) must apply an interest rate that covers their costs and risk, while generating profits, Also microentrepreneurs need, to this end, to ensure the profitability of their activities. This paper presents the microfinance sector in Morocco. It focuses then on the interest rate applied by the Moroccan microfinance institutions; it provides also a comparative study between Morocco and other comparable countries in terms of interest rates charged to borrowers. Finally, this article presents a stochastic model of the interest rate in microcredit built in random loan repayment periods and on a real example of the program of loans of microfinance institution in Morocco.

scholarly journals Analysis of Informal Microfinance Institutions Structures in Relation to Performance in Tharaka South Subcounty, Kenya

2020 ◽  
Vol 9 (3) ◽  
pp. 457
Author(s):  
Caxton Gitonga Kaua ◽  
Thuita Thenya ◽  
Jane Mutheu Mutune
Keyword(s):  
Gender Equity ◽  
Low Income ◽  
Financial Services ◽  
High Performance ◽  
Vulnerable Groups ◽  
Microfinance Institutions ◽  
Design Data ◽  
Multi Stage ◽  
Key Policy ◽  
And Performance

Informal microfinance is the delivery of financial services mainly to low income people outside the regulation of the monetary authority. Despite their importance in development, no studies have undertaken a detailed analysis of structures and performance in informal microfinance institutions. This study aims to analyze structures and performance in informal microfinance institutions in Tharaka South Sub County. It uses descriptive study design and multi stage sampling design. Data analysis was done using thematic, descriptive and Kendall’s tau-b correlation analysis. An informal microfinance performance index was developed using inductive and hierarchical approaches. The study found the informal microfinance institutions are marked by high performance which is determined by their structures. Moreover, the study deduced that informal microfinance is a key policy strategy for poverty alleviation, financial inclusion, gender equity and resilience building since participants mainly include women and other vulnerable groups. Keywords: Capital, Livelihoods, Informal, Microfinance, Performance, social 

scholarly journals Evaluating the Impact of Microfinance at the Individual Level in Albania, Particularly in the Region of Vlora and Fier

2018 ◽  
Vol 1 (1) ◽  
pp. p143
Author(s):  
Oltiana Muharremi ◽  
Edlira Luҫi ◽  
Filloreta Madani ◽  
Erald Pelari
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Microfinance Institutions ◽  
Way Of Life ◽  
Individual Level ◽  
Right To Development ◽  
Micro Insurance ◽  
The Individual ◽  
The Impact ◽  
Micro Credit

Microfinance is defined as the provision of financial services such as micro-credit, micro savings, and micro insurance for individuals with low income. Although access to micro credit is seen as a right to have credit, it rather represents a right to development and economic initiatives that could change the borrower’s way of life. The purpose of this article is to examine the impact of microfinance loans in improving the living conditions of borrowers. This study is based on an empirical investigation of 384 structured questionnaires directed at microfinance institutions in the regions of Vlore and Fier, Albania.

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