Examining the Viability of Social Responsibility of Microfinance by the Bank Compartamos, Mexico

2019 ◽  
pp. 165-186
Author(s):  
José G. Vargas-Hernández ◽  
María Alejandra Santos Huerta ◽  
Kinkini Bhattacharjee
Keyword(s):  
Social Responsibility ◽  
Market Share ◽  
Financial Services ◽  
Inverse Correlation ◽  
Financial Inclusion ◽  
Base Of The Pyramid ◽  
The Poor ◽  
The People ◽  
The Creation ◽  
Poor Population

Microfinance achieves financial inclusion to the poor population stimulating the creation of sources of income and employment. Banco Compartamos is an institution that has more market share and has more than 20 years providing financial services to their specific sector of the population. The chapter analyzes the viability of social responsibility of microfinancing by the Compartamos banco of Mexico for the period 2002-2015. The results show that microfinance working on social responsibility by the Compartamos Banco is not viable as there are the results of inverse correlation results. However, the banco served some social responsibility by means of pulling people out of poverty. It further concludes that these organizations fulfill their main objective, which is to benefit the people of the base of the pyramid in Mexico.

Marketing of Microfinance for Rural Women

2017 ◽  
pp. 153-184
Author(s):  
Pallavi Mathur ◽  
Parul Agarwal
Keyword(s):  
Economic Development ◽  
Transaction Cost ◽  
Rural Women ◽  
Financial Services ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Rural Economic Development ◽  
The Poor ◽  
High Transaction Cost ◽  
Poor Population

Microfinance, the provision of financial services to poor and under-served societies, has emerged as one of the most promising possibilities for stimulating rural economic development through local enterprise. Banking sector in India has proved to be one of the largest sectors in the Indian financial system. Earlier banks restrained from lending to the poor due to high transaction cost and high credit risk involved in dealing with such kind of population. Microfinance programme aims at reaching out to the poor population especially women thus fulfilling the objectives under the financial inclusion.

scholarly journals Information Asymmetry and Trust: A Framework for Studying Microfinance in India

2005 ◽  
Vol 30 (4) ◽  
pp. 77-86 ◽  
Author(s):  
M S Sriram
Keyword(s):  
Social Networks ◽  
Transaction Costs ◽  
Rural Areas ◽  
Financial Services ◽  
Imperfect Information ◽  
Informal Networks ◽  
The Poor ◽  
The People ◽  
Financial Transactions

In recent times, microfinance has emerged as a major innovation in the rural financial marketplace. Microfinance largely addresses the issue of access to financial services. In trying to understand the innovation of microfinance and how it has proved to be effective, the author looks at certain design features of microfinance. He first starts by identifying the need for financial service institutions which is basically to bridge the gap between the need for financial services across time, geographies, and risk profiles. In providing services that bridge this gap, formal institutions have limited access to authentic information both in terms of transaction history and expected behaviour and, therefore, resort to seeking excessive information thereby adding to the transaction costs. The innovation in microfinance has been largely to bridge this gap through a series of trustbased surrogates that take the transaction-related risks to the people who have the information — the community through measures of social collateral. In this paper, the author attempts to examine the trajectory of institutional intermediation in the rural areas, particularly with the poor and how it has evolved over a period of time. It identifies a systematic breach of trust as one of the major problems with the institutional interventions in the area of providing financial services to the poor and argues that microfinance uses trust as an effective mechanism to address one of the issues of imperfect information in financial transactions. The paper also distinguishes between the different models of microfinance and identifies which of these models use trust in a positivist frame and as a coercive mechanism. The specific objectives of the paper are to: Superimpose the role of trust in various types of exchanges and see how it impacts the effectiveness of repeated transactions. While greater access to information fosters trust and thus helps social networks to reduce transaction costs, there could be limits to which exchanges could solely depend on networks and trust. Look at the frontiers where mutual trust cannot work as a surrogate for lower appraisal costs. Use an example in the Canadian context and see how an entity that started on the basis of social networks and trust had to morph into using the techniques used by other formal nonneighbourhood institutions as it grew in size and went beyond a threshold. Using the Canadian example, the author argues that as the transactions get sophisticated, it is possible to achieve what informal networks have achieved through the creative use of information technology. While we find that the role of trust both in the positivist and the coercive frame does provide some interesting insights into how exchanges with the poor could be managed, there still could be breaches in the assumptions. This paper identifies the conditions under which the breaches could possibly happen and also speculates on the effect of such breaches.

scholarly journals Challenges Facing Financial Inclusion Due to the COVID-19 Pandemic

2020 ◽  
Vol 3 (2) ◽  
pp. 50
Author(s):  
Tea Kasradze
Keyword(s):  
Low Income ◽  
Small And Medium Enterprises ◽  
Financial Inclusion ◽  
Financial Resources ◽  
Financial Products ◽  
The Poor ◽  
Wide Range ◽  
Medium Enterprises ◽  
The Impact ◽  
Poor Population

Financial inclusion is often considered as an access to financial resources for the wide public and small and medium-sized businesses, although it is a much broader concept and includes a wide range of access to quality financial products and services, including loans, deposit services, insurance, pensions and payment systems. Mechanisms for protecting the rights of consumers of financial products and services are also considered to be subject to financial inclusion. Financial inclusion acquires great importance during the pandemic and post-pandemic period. The economic crisis caused by the pandemic is particularly painful for low-income vulnerable population. A large part of the poor population who were working informally has lost source of income due to lockdown from the pandemic. Remittances have also been reduced / minimized, as the remitters had also lost jobs and are unable to send money home. Today, when people die from Coronavirus disease, it may be awkward to talk about the financial side of a pandemic, but the financial consequences can be far-reaching if steps are not taken today to ensure access to and inclusion of financial resources. The paper examines the impact of the pandemic on financial inclusion and the responses of the governments and the financial sectors to the challenge of ensuring the financial inclusion of the poor population and small and medium enterprises.

scholarly journals The Nexus between Mobile Money Regulation, Innovative Technology and the Promotion of Financial Inclusion in Zimbabwe

2021 ◽  
Vol 24 ◽  
pp. 1-33
Author(s):  
Howard Chitimira ◽  
Elfas Torerai
Keyword(s):  
Low Income ◽  
Rural Areas ◽  
Financial Services ◽  
Banking Sector ◽  
Regulatory Framework ◽  
Financial Inclusion ◽  
Innovative Technology ◽  
Technological Innovations ◽  
Mobile Money ◽  
The Poor

The advent of mobile money innovations has given people in rural areas, informal settlements and other poor communities an opportunity to participate in Zimbabwe's mainstream financial economy. However, the technology-driven money services have presented some challenges to the traditional banking sector in general and the regulation of financial services in particular. Firstly, most mobile money services are products of telecommunication corporations, which are not banks. Telecommunication companies use their network reach to provide mobile money services via mobile devices at a cheaper cost than banks across the country in Zimbabwe. As such, banks face unprecedented competition from telecommunications companies that are venturing into financial services. It also appears that prudential regulation of banks cannot keep up with the fast pace at which technological innovations are developing and this has created a disjuncture between the regulation and the use of technological innovations to promote financial inclusion in Zimbabwe. The Banking Act [Chapter 24:20] 9 of 1999, the Reserve Bank of Zimbabwe Act [Chapter 22:15] 5 of 1999 and the National Payment Systems Act [Chapter 24:23] 21 of 2001 have a limited scope in terms of the regulation of mobile money services in Zimbabwe. The Ministry of Finance and Economic Development launched the National Financial Inclusion Strategy (NFIS) 2016-2020 to provide impetus to the financial inclusion of the poor, unbanked and low-income earners in Zimbabwe. However, the NFIS appears to push more for bank-led financial inclusion than it does for innovation-driven initiatives such as mobile money services. This article highlights the positive influence of mobile money services in improving financial inclusion for the poor, unbanked and low-income earners in Zimbabwe. The article also seeks to point out gaps and flaws in the financial services regulatory framework that may limit the potential of mobile money services to reach more people so that they actively participate in the Zimbabwean economy. It is submitted that the Zimbabwean mobile money services regulations and the financial regulatory framework should be carefully amended in line with the recent innovations in mobile money to adequately regulate the use of mobile money services and innovative technology to address the financial exclusion of the poor, unbanked and low-income earners in Zimbabwe.

Financial Inclusion in India

2016 ◽  
pp. 95-104
Author(s):  
Rohit Bhattacharya
Keyword(s):  
Financial Services ◽  
Poverty Reduction ◽  
Significant Proportion ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Working Paper ◽  
Road Map ◽  
The Poor ◽  
Financial Exclusion ◽  
The World

The concept of Financial Inclusion is not a new one. It has become a catchphrase now and has attracted the global attention in the recent past. Lack of accessible, affordable and appropriate financial services has always been a global problem. It is estimated that about 2.9 billion people around the world do not have access to formal sources of banking and financial services. India is said to live in its villages, a convincing statement, considering that nearly 72% of our population lives there. However, a significant proportion of our 650,000 odd villages does not have a single bank branch to boast of, leaving swathes of the rural population in financial exclusion. RBI has reported that the financial exclusion in India leads to the loss of GDP to the extent of one per cent (RBI, Working Paper Series (DEPR): 8/2011). Financially excluded people, consistently, depend on money lenders even for their day to day needs, borrowing at excessive rates to finally get caught in a debt trap. In addition, people in far-off villages are completely unaware of financial products like insurance, which could protect them in adverse situation. Therefore, financial inclusion is a big necessity for our country as a large chunk of the world's poor resides here. Access to finance by the poor and vulnerable groups is a prerequisite for poverty reduction and social cohesion. Present paper is an attempt to highlight the present efforts of financial inclusion in India its future road map, its challenges etc.

Mobile Financial Services

2020 ◽  
pp. 96-119
Author(s):  
Alexander Maina Kimari ◽  
Eric Blanco Niyitunga
Keyword(s):  
Financial Services ◽  
Developing World ◽  
Service Providers ◽  
Customer Experience ◽  
Financial Service ◽  
Financial Inclusion ◽  
The Poor ◽  
Financial Exclusion ◽  
Mobile Financial Services

The chapter explores financial exclusion, its causes, and consequences in society. The chapter found that the existing discrepancy in financial inclusion between the developed and developing world is driven by financial exclusion that makes it difficult for financial service providers to expand outreach to the poor at affordable prices. The chapter aims to investigate the role of mobile financial service design and development in dealing with financial exclusion. It was found that mobile financial services are promoting financial inclusion in various markets. However, few studies have been undertaken on the benefits of mobile financial services in dealing with the high rates of financial exclusion. The chapter recommended that to achieve financial inclusion, there is need for mobile financial services providers to take into account customer experience through the ease of using the phone interface. The chapter concluded that there is need for scholars in the fields of finance and economics to conduct research in the areas of mobile financial services and their role in society.

scholarly journals Financial Inclusion through Islamic Banking

2017 ◽  
Vol 6 (2) ◽  
pp. 324
Author(s):  
Mumna Nazar
Keyword(s):  
Financial Services ◽  
Banking System ◽  
Secondary Data ◽  
Financial Inclusion ◽  
Primary Data ◽  
Islamic Banking ◽  
Committee Report ◽  
Secondary Sources ◽  
The People ◽  
Financial Exclusion

<div><p><em>Financial inclusion is a buzz word today. It plays an important role in driving away the poverty from the country. Financial inclusion is the process of ensuring financial services to the weaker sections of the society at an affordable cost. As per the Sachar Committee Report, Muslims in India are financially excluded. Even though they have an account, the extent of usage is very low due to the religious reasons.  The Non-Muslims also do not actively engage in the formal financial system due to the interest involvement. Islamic Bank can serve as a remedy for the financial exclusion of the Muslims as well as Non-Muslims community. The objective of this paper is to understand the extent of financial inclusion among the people in Kerala and their awareness and preference towards Islamic banking. Both primary and secondary data are collected for the study. Secondary data are collected from various secondary sources like published articles, journals, reports, books and websites. Primary data are collected with the help of questionnaire among people in Kerala. The study revealed that most of the respondents have accessed bank accounts but the extent of usage is only for namesake. Moreover the awareness and preference towards Islamic Banking is very high among the Muslims as well as Non-Muslims and suggested that proper care must be taken for introducing Islamic banking system in India. It will ultimately leads to the inclusive growth of our country.</em></p></div>

scholarly journals Financial Inclusion, Awareness, and Understanding of Financial Products among People Selected Gewogs (Blocks) of Bhutan

2019 ◽  
Vol 8 (11S2) ◽  
pp. 485-494
Keyword(s):  
Financial Services ◽  
Financial System ◽  
Secondary Data ◽  
Primary Objective ◽  
Financial Inclusion ◽  
Primary Data ◽  
Journal Articles ◽  
Financial Products ◽  
The People ◽  
Survey Finding

The financial products that are being offered by the banks in the contemporary era are significant to enhance the primary objective of the banks that is, ‘Financial Inclusion’ (FI). However, due to umpteen reasons, the banks in many countries have failed streamlining the poor and the majority of the rural folk. Bhutan is not an exception as it is in a landlocked country. The Survey finding (2013) depicted a smaller share of Bhutanese involvement in the formal financial system (48%) whereas larger percentage of them involved in informal financial system. Further, the present Governor of Royal Monetary Authority (The central bank of the country), Dasho Penjor in his discussion on the review of His Majesty’s address on 109th National day Celebration in Trongsa stated that the majority of the rural folks are unable to avail banking services extended by the formal institutions. Besides, financial services can be availed by mass only when banks and other financial institutions run some awareness programmes. There are a few literature on FI in Bhutan in general; however literature on the awareness and understanding of financial products of the people are minimal in the country. The present study, therefore, investigates the scenario of FI along with awareness and understanding of financial products of commercial banks among Bhutanese in four Gewogs (Blocks) of the country that is, Bongo, Chapcha, Darla and Samphelling. The structured questionnaire was designed and primary data from 378 respondents were collected. Further, various articles and papers published in survey findings, magazines, and journal articles are used as secondary data sources of the study. The collected data have been tabulated, analysed, and interpreted with the help of Descriptive statistics, Independent t-test and Analyses of Variance (ANOVA).

scholarly journals Fungsi Corporate social responsibility (CSR) Dalam Pengembangan dan Pemberdayaan Masyarakat

2019 ◽  
Vol 8 (2) ◽  
pp. 203
Author(s):  
Rahmadani Rahmadani ◽  
Santoso Tri Raharjo ◽  
Risna Resnawaty
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Community Empowerment ◽  
Community Or ◽  
Is Implementation ◽  
The People ◽  
Target Program ◽  
The Creation ◽  
Corporate Social ◽  
A Company

ABSTRAKCorporate social responsibility merupakan salah satu bentuk kepatutan yang diberikan oleh perusahaan kepada masyarakat yang berada di sekitar perusahaan. Adanya tanggungjawab sosial perusahaan ini dapat memberikan sebuah perubahan positif di dalam kehidupan masyarakat atau komunitas. Pelaksanaan program corporate social responsibility oleh perusahaan seharusnya dapat memunculkan kemandirian masyarakat, karena dalam corporate social responsibility sendiri terdapat tipe implementasi pemberdayaan. Oleh sebab itu, perusahaan perlu mengedepankan program corporate social responsibility yang dapat meningkatkan kemandirian dan meningkatkan kesejahteraan masyarakat yang menjadi sasaran dalam target program. Pemberdayaan masyarakat menjadi salah satu upaya dan metode yang dapat digunakan oleh perusahaan dalam menciptakan kondisi masyarakat yang aktif, partisipatif dan mandiri. Hal ini dikarenakan dalam pemberdayaan masyarakat mendorong terciptanya masyarakat yang aktif dan partisipatif untuk mencapai tujuan yang ingin dicapai. Dengan demikian, jika sebauh perusahaan merancang program-program corporate social responsibility yang bertujuan untuk memandirikan masyarakat maka perusahaan harus menggunaka metode pemberdayaan masyarakat agar tercapainya pelaksanaan program corporate social responsibility yang membuat masyarakat menjadi berdaya, mandiri dan tidak ketergantungan. ABSTRACTCorporate social responsibility is one form of propriety provided by companies around the company. The existence of corporate social responsibility can provide positive responsibility in the life of the community or community. Implementing corporate social responsibility programs by companies that can bring about community independence, because in corporate social responsibility itself there is implementation of empowerment. Therefore, companies need to prioritize corporate social responsibility programs that can increase independence and improve the ability of the people who are targeted in the target program. Community empowerment is one of the efforts and methods that can be used by companies in creating conditions for an active, participatory and independent society. This is because in community empowerment the creation of an active and participatory community to achieve the goals to be achieved. Thus, if a company is adjusted to corporate social responsibility programs that aim to empower the community, the company must use the method of community empowerment to achieve the implementation of corporate social responsibility programs that make the community empowered, independent and not dependent.

scholarly journals PEMBERDAYAAN BERBASIS MASJID MELALUI DANA CORPORATE SOCIAL RESPONSIBILITY (STUDI KASUS PROGRAM AKSI UMMAD)

2020 ◽  
Vol 7 (2) ◽  
pp. 332
Author(s):  
Nurendahsari Gunawan ◽  
Siti Inayatul Faizah
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Services ◽  
Qualitative Approach ◽  
Action Program ◽  
Exploratory Case Study ◽  
Program Success ◽  
The People ◽  
Corporate Social

This study aims to understand the implementation of mosque-based empowerment through CSR (Corporate Social Responsibility) funds in improving the economic benefit of the people around the mosque. This study uses a qualitative approach with an exploratory case study strategy. The object of this study is Ummad Action Program, which was initiated in 2017 by the Financial Services Authority (OJK). The results of this study are that each partner knows and agrees with the background, goals, and benchmarks of program success. However, each partner has not been optimal in carrying out their duties and responsibilities. Moreover, the success of the Ummad Action Program can be assessed in terms of the benefits felt by the congregation, including the category of success with several evaluations.Keywords: Empowerment, Corporate Social Responsibility, Mosque, Financial Services Authority (OJK).

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