Microfinanceinstitutions use ICT at different levels for financial services provision. ICT has eased communication services, data processing services and report generation activities in some microfinanceinstitutions. Survey results show that most MFIs have more than 1000 clients which makes computerization of businessservices a feasible exercise. Less than half of these institutions use ATMs to provide financial services to their clients. In most cases the management of an MFI acquires software for an institution using outsourcing approach. These institutions hardly use open source software tools for business automation. About 30% of the institutions we visited plan for their ICT strategy with the remaining 70% having no strategic plans for ICT use and management. ICT adds value to existing financial services when used constructively to support business data processing and communication. ICT brings new opportunities to microfinanceinstitutions apart from office automation. We see ICT has been used in some countries to create branchless microfinance banks. In Nigeria there is still problem with infrastructure to create branchless banks. With government plans of setting up communication infrastructure for e-government, microfinancebusiness stands to benefit from shared infrastructure. There is need for the top management of MFIs to align their business strategies with IT strategies if they are to benefit from the available infrastructure provided by the government. This research focused on ICT for businessservices and staff skills development. We found that microfinance software has been developed by some computer companies to support business processes.
First, six cases (six MFIs), and two individual cases (an external trainer and a BDS consultant) were set up in NVivo. Second, the interview transcripts which form the data sources were imported to NVivo from the individual case studies. Coding then allowed the researcher to classify the interview data into meaningful themes. There are two types of coding in NVivo: 1. Auto coding, and 2. Manual coding. Auto coding is recommended for research using structured questionnaires in order to obtain answers to the questions in a consistent way. The structured format enables the researcher to compile answers to each question into a node. Auto coding is particularly useful when dealing with large datasets. In contrast, manual coding is used when there is a relatively small data set and the study requires close analysis. In manual coding, the researcher identifies the themes based on the sources and then creates nodes in Nvivo. The researcher then drags and drops relevant references (i.e. quotations) to manually created nodes. In this study, manual coding was used because the researcher does not use a structured questionnaire which generates answers in a consistent way and there was also a manageable data set. Further concepts/themes emerged when data was being analysed, which were different to the themes identified by the software based on common words/similarities on the interview transcripts. Thus manual coding was preferred to auto coding.
The development of SMEs is largely determined by the existence of MFIs that offer financing models are diverse. It can be said that MFIs become a partner of SMEs in this regard as a financial services provider, through diverse financing models. But on the other hand the diversity of financing models offered by MFIs have not been fully able to be utilized. This study used exploratory research, descriptive, experimental and applied research conducted in stages for the development of a comprehensive model of microfinance accommodative Informants determined based on the information needs. Using a descriptive and qualitative analysis of the MFI deliberately selected examples illustrate the following: (A) The existence of MFIs is recognized community has a strategic role as an intermediary in economic activity that has not affordable public services of banking institutions / conventional banks; (B) service MFIs have demonstrated success, but success can still be in business economics. Skim MFI lending to businesses has not received the priority, it is characterized by a relatively small ceiling (budget allocation) to support farming, which is less than 10% of the total ceiling of MFIs; (C) A critical factor in the development of the agricultural sector MFI lies in the institutional legality, capability management, seed capital support, the economic viability of farming, farm characteristics and technical assistance clients / service users MFIs; (D) To initiate the growth and development of agricultural MFIs needed guidance enhanced capabilities for HR candidates MFI managers, support the strengthening of capital and technical assistance to customers of credit users.
sampling of 213 clients from 58 microfinanceinstitutions (MFIs) in the Ashanti and Greater Accra regions, the two most urbanized regions of Ghana. Multiple and logistic regression analyses showed that the increase in business profits, stock and business assets after the acquisition of microfinance loans were statistically significant, indicating that the loan amount had significant impact on profit levels, stock adjustments, and acquisition of business assets. However, the change in employment was statistically insignificant. Adeoye Amuda Afolabi , have determined how Microfinance Banks (MFBs) impacts on entrepreneurship development in Nigeria. Data were collected through structured interview from entrepreneurs, Microfinance Bank managers and Regulators. The finding revealed that non-financial services of Microfinance Banks contribute to the survival of entrepreneurs and there is indication that Microfinance Banks enhance the productivity of entrepreneurship. This finding supports the evidence from the Central Bank of Nigeria (CBN) that there is an increase in total assets, Investment and Deposit Liabilities of MFBs in recent times. Beside this, respondents claimed that influence and control over entrepreneurships financing by Microfinance Banks should be view as partially effective. This result suggests that although Microfinance Banks in Nigeria are trying their best, there is need to put more effort in order to meet total demand of financing the entrepreneurships in Nigeria. Muogbo Uju Sussan; Tomola Obamuyi , examined the impact of microfinance bank on entrepreneurship development in Anambra State. To achieve the stated objective of the study, three research questions were formulated. The descriptive research design was adopted for the study. The population of the study was 734 staff of ten (10) selected entrepreneurial firms in Anambra State. It was impracticable to study the whole population therefore 259 staff were sampled using stratified sampling technique. Out of the 259 copies of the structured questionnaire administered to the respondents, 192 were completed and returned. The data obtained were analysed using Pearson correlation for hypothesis one and ANOVA for hypotheses 2, and 3 respectively. The findings revealed that microfinance bank impact significantly on the development of entrepreneurship in Nigeria; that there are problems that militate against the effective financing of entrepreneurial businesses in Anambra State.
Granting credit to low income individuals is faced with high credit risk (Simone, 2011) which may cause high level loan losses, consequently failure of the financial institution (Richard et al., 2008; Dahir, 2006). The Tanzanian microfinance sector also incorporates ineffective credit risk management. It has badly affecting financial performance of most microfinanceinstitutions (Warue, 2012). It arises from a potential borrower who is either unwilling to perform on an obligation or their ability to perform is impaired, causing economic loss to lending institutes (Fight, 2004). Navajas et al. (2010) and Colquitt (2007) point out that weak credit supervision practices have been the main cause of business failure including financial institutions. Thus, effective credit supervision may be considered a necessary road map into a safety approach to enable sustainable loan portfolio performance of microfinanceinstitutions.
Human resource provides a group with an effective workforce in order to meet its mission. Humandevelopment relies mainly on training and developmental activities. Effective human resource uses system and tools to bring together: the right number of people, with right attitude and skills, in right place, at right time”. Microfinance, the development buzzword of the nineties was meant to cure the illness of rural poverty. The Indian microfinance scene is dominated by SHGs and their linkage to bank with self-reliance, self-sufficiency and self-help gained momentum. The goal of human resource system, tools and activities is to help the individual employees who make up his/her microfinance institution to be successful at their jobs. Self Help Groups or SHGs represent a unique approach to financial intermediation. The SHG approach combines have access to low-cost financial services with a process of self management and development for the needy people, who are SHG members. SHGs are having link not only with banks but also with wider development programmes. But there are also some questions. How effective are the groups in managing their financial transactions? Individuals cannot only enhance the success of the individuals, but can encourage a team effort capable of reaching goals beyond what one person can do alone. So, microfinance is helping the individuals in group formation. The success of group approach in rural micro-finance among the poor has inspired the tendency to look at all networking as essential and desirable in rural community development. This paper examines to find out how microfinance is helping the human resource development and what are the real situations of that group for the development? The major issues addressed in this study are the effect on human resource development by the formation of microfinance in this region which includes the nature of activities, work space, training and development of skills and marketing of finished products which are main parts of human resource development.
Research has shown that religion plays an important element in the achievement of social values and performance and IMF has been proved to be a powerful tool to fight poverty. Nevertheless even though IMF has been applied as the mode of financing, it must be implemented in accordance with shariah-compliant methodology. Shariah-compliant covers the competency of IMFI’s AIS (Romney and Steinbart, 2012; Wardiwiyono, 2012) in tracking its accounting activity in conjunction with IT resources which mainly include the system of loan repayments and disbursement (Weber, 2012; Abd Ghani, 2013). A proper AIS is important in deciding on further IMF loan approval for the existing loan recipients and also for the potential loan recipients (Kauffman and Riggins, 2012).From the research done it can lead to the conclusion that MB is an appropriate mechanism for cost reduction and flexibility enhancement. This is due to the fact MB offers cost effective service delivery channels in achieving the target of financing the poor in the remote areas (The Louis Berger Group Inc., 2011). MFIs are often exposed to risks on extending loans and services to MF recipients without credit histories or collateral. In enabling them to keep their financial stability, many MFIs charge interest on MF loan to cover their administrative and operational costs. Thus by implementing MB, MFIs are able to defray overhead costs and there will be a reduction of operation costs as manual collection and cash handling are no more needed (Senthe, 2012). Hence, the ability of MB to fit with the ecosystem make it a very suitable tool to the IMF fraternity as it assists IMFIs in reducing cost to combat the challenge of riba’ and facilitate the AIS (Alhuda CIBE, 2013). The combination of the aforementioned elements will bring forward to the success factors of the IMFIs to alleviate poverty.
Table 3 includes some very interesting results. To save space and avoid unnecessary discussion, we will only discuss results that are statistically significant. After controlling for the impact of initial income, age, education, sex, occupation and working hours per day, the income of the respondents is positively influenced by all three measures of MFIs. The case with consumption of food, and health, is similar. While there is no meaningful association between total and per capita household income and type of the respondent and period with MFI, both the variables are negatively associated with loan size. In effect, the negative association between loan size and household total and per capita income preserves the purpose of the next model. The average loan size of the two financial institutions offer- ing microloans is US$2000, while the average loan size of the two NGOs is US$200. Thus, in the very short run, paying back a comparatively large amount with mark-up should have different behavioural effects than paying back only a small principal amount. This is exactly what is implied by the results and confirmed by, although insignificantly, the negative relationship between loan size and household total and per capita consumption. That is, accidentally, loan size in the above case serves as a proxy for the effects of rate of interest on the impact variable. Having negative estimated coefficients implies that the rate of interest on microloans is negatively associated with poverty alleviation efforts, an issue that is further explored in the next model.
Almost no evidence was found in earlier studies of the effect of access to microcredit on SME performance, particularly in Malaysia. In this study, we investigate the effect in Malaysia of access to microcredit on the performance of enterprises using cross sectional data collected through a survey questionnaire. To identify the causal effect of access to credit on SME performance, there are two potential econometric problems that arise. They are endogeneity and selection bias associated with the analysis of the impact of access to credit. The endogeneity problem arises in assessing the impact of credit using cross section data such as non-random allocation of credit, characteristics of the households and SMEs, and networking with credit officials. Since the microcredit provider has an opportunity to screen the applications from SMEs, it is likely that credit is distributed to the better- off enterprises, which are assumed to yield better performances. For example, SMEs that can access credit will be able to expand and generate higher profits, thereby promoting growth. Similarly, other SMEs have lower growth because of the difficulty of obtaining credit. Therefore, access to credit is endogenous. There is no empirical evidence that a study of the effect of microcredit on SME performance in Malaysia takes into account the endogeneity problem. Since panel data were available only for the outcome indicators and not available for other variables, the instrumental variable with fixed effect cannot be implemented. Therefore, this study employed the ESR model to address the endogeneity issues to investigate how microcredit access affects SME performance; the choice of the ESR model is supported by Khalily & Khaleque (2013). They investigated the effect of access to credit on the productivity of enterprises in Bangladesh using ESR to overcome endogeneity issues.
The government through MESA should extend needed training and networking to promote entrepreneurship in Kenya. County governments have a role in creating a favourable policy on MSEs and MFIs operations. The policy will help to encourage entrepreneurship that will contribute to reducing unemployment that result into social vices.MSE enterprises should form an association that will help them air their grievances to MFIs, banks, and government. It will also assist in identifying both financial and non-financial problems hindering the survival of MSEs and look for possible solutions. Further, it will offer business links and provide information on available business opportunities.MFIs need to impart necessary business skills to MSEs through training and encouraging MSEs to participate in microfinance for up to date information. Also, they need to have an updated database on the available MSEs and keep a close monitoring of the challenges facing them while offering solutions to reduce instances of MSEs collapse.
MFIs are considered very fundamental development stakeholders for poverty alleviation in Bangladesh. Micro- enterprise loan is one of the important services provided by them. It is expected to ensure self-employment in small scale businesses especially for the rural poor where employment opportunities are very low. MFIs play a crucial role in MEs development by providing consultancy and loan facility. MFIs normally provide micro-enterprise loans for starting up or scaling up the MEs to the entrepreneurs who are deprived from the formal financial sector due to their lack of collateral, connections and financial literacy. The demand of microenterprise loan is in increasing trend and the MFIs’ microenterprise loan disbursement and outstanding became more than the previous year. In 2015, the total micro- enterprise loan outstanding of MFIs was BDT 115.52 billion which is 41% more than microenterprise loan outstanding of previous year. The following table shows the increasing share of micro-enterprise loan to the total loan outstanding of the MFIs licensed under Microcredit Regulatory Authority (MRA).
This study aimed at identifying the impact of foreign direct investment on poverty reduction and whether there exists a causal relationship between FDI and poverty reduction in Nigeria. The study was based on time series data which were collected from secondary sources and cover the period from 1980-2012.the OLS estimation technique has been applied to estimate the mode and Co integration as well as Error Correction mechanism test were also carried out. Estimation results reveal that FDI responds positively to real per capita GDP both in the long run and short run but with no effect. Thus, we concluded that this may be a result of profit repatriation of foreign firms, crowding out of domestic investment because of FDI or low level of human capital in the country. Despite how desirable the inflow of FDI is to developing countries, care should be taken when attracting foreign investments and they should be directed to the productive sectors of the economy. Also government should create a competitive environment so as to maximize the benefits of FDI because by exposing foreign investors to an even playing field with indigenous investors, this will enable domestic companies to upgrade their management and technology. Finally, the revenue fortune accruable to federal government by way of taxes paid by foreign investors should be directed to productive activities in the real sectors of the economy, especially agriculture.
In order to ascertain construct validity, we took the following two steps: First, our study uses ICT adoption as the element of ‘initial change’ and our method categorized these adoption activities using a version of Kroenke’s (2012) elements of an information system modified for our specific context and research materials. Second, we cite other theories and studies that inform our theory building. We attempt to address internal validity requirements by specifically looking for some of the rival explanations. We acknowledge that other unobserved factors likely contribute to improvements in operations and outreach; ICT adoption is one of several alternative explanations. One such rival explanation is that wealthier MFIs are able to invest in technology and dedicate more capital lending stock toward poor and distant clients, resulting in correlation between the two elements, but not necessarily causation. Another explanation is that outside funders share an increasing tendency to fund MFIs with a proven track record of strong outreach performance. In our research materials we did not observe support for these rival explanations. To account for external validity, we collected research materials at several MFIs spread over multiple continents. When pooled and placed into the framework of our model, the research materials fit into common patterns. Future research replicating our study may find results that deviate from ours, but given our sizeable and geographically diverse representation of MFIs, we anticipate more overlap from one replication to another. Finally, we address reliability by having documented procedures, asking the same questions at each MFI and with each respondent, and by assigning equal weight to each interviewee’s responses. Moreover, maintaining a case study database of not merely the list of the people and organizations visited, but also field notes, a narrative organizing findings, citations, and interview responses by question, also contributes to reliability (Bickman and Rog, 1997).
Above table shows that microfinance borrowers were found to be 0.22 more efficient than non-borrowers as shone by the coefficient of credit in the above table. And it is highly significant even at 1% level of significance. shopkeepers whose customer are general public were 0.04 more efficient than those whose customer were retailers but insignificantly even at 10% level of significance. business experience was found to be significant factor to determine the efficiency at 1% significance level. The reason behind is that traders of younger age were more efficient than the older as the younger traders are more educated, therefore they are more efficient. Education is positively related with efficiency and it is significant at 10% level of significance. shopkeepers having their own shop were insignificantly more efficient than the shopkeepers having rented shop. However shopkeepers having their own house were far more efficient and found to be 0.19 more efficient than shopkeepers having rented house at even 1% level of significance. Average Propensity to Consume (APC) obtained by dividing the domestic expenditures by their total income, was also turned to be a significant determinant of Efficiency. APC has a negative impact on the Variable Returns to Scale Technical Efficiency (VRSTE) and it is significant at 10, 5 and 1% level of significance. reason behind is that with an increasing prices traders have to invest more and more in their shops. So the shopkeepers having higher APC investment less on their business, as a consequence their profits decrease.
This paper sought the analysis of microfinanceinstitutions outreach on the realization of economic pillar of vision 2030.Microfinance institution outreach in this study is checked in terms of breadth and depth. In line with economic pillars for vision 2030, MFIs are vital in advancing credit to the communities which are financially constrained but have feasible, practicable and promising investment business ideas. This study was carried in Kakamega County which has very high level of poverty. This study adopted Cross-sectional research design and correlation design. The target population in this study consist of businesses deriving their capital from 15 micro- finance institutions both small scale and medium scale, Employees of MFIs comprising of branch manager, credit officer, risk officers and operational manager. The results indicated that MFI outreach had a statistically significant influence on the realization of vision 2030 in Kakamega. The study concluded that MFI outreach had significant positive influence on the realization of economic pillar of vision 2030
The general agenda of microfinance is to extend financing facilities to the population in rural and remote areas, especially to the poor. However, distance and insufficient infrastructure have always been associated with conditions at remote areas. Access roads and public transportation to most remote areas are seldom maintained and are often in poor shape. These make it difficult for microfinance recipients to commute from their home to the bank. Consequently, this will result in inefficient communication where movement of information becomes slow and easily interrupted. As such, the current study investigates how microfinance recipient behaviour could affect implementation of mobile banking in microfinanceinstitutions (MFIs). As a leading microfinance provider in Malaysia, Amanah Ikhtiar Malaysia (AIM) was selected as a case study for the current study. Usage of the M-Ringgit mobile banking was investigated to look into its current practices as well as recipient behaviour in making repayments using the M-Ringgit. The case findings demonstrate that no matter how sophisticated the M-Ringgit technology is, sahabats must be educated enough to use the M-Ringgit. Therefore, by giving M-Ringgit training to sahabats, AIM exercises its vicegerent duties in ensuring that sahabats are capable to use the M-Ringgit.
Despite that financial service providers in developing countries have begun turning fixed costs into variable costs and use new channels; they are often hampered by “regulation” (Weber & Darbellay, 2010). M-PESA in Kenya is an example of how governmental regulations may facilitate (or hinder) the success of mobile-based financial services. The Kenyan banks claimed that their regulated services have been overwhelmed by M-PESA who, within two years of operation, had 13,142,550 in comparison to 8,600,258 existing bank customers (CGAP, 2011). Regulators focus on the aggregation of funds through receiving deposits from the poor than the rich people while offering the same interest rate (Ivatury & Mas, 2008). Bankers are restricted by operational regulations that govern how they develop their products, distribution channels, information systems and management structure. Altogether affect their ability to innovate and drive up costs and in turn decrease their profitability in such market (Mas, 2011). In Kenya, for instance, bank branches are subject to periodical physical inspection by an authorized representative of the central bank. In case of service termination, they are also required to give six months“closing notice”to the central bank (Mas, 2011). It does not mean M-PESA runs free of risks. Ivatury & Mas (2008) reported lots of operational problems 2 concerning the possibility of data leaks at the retail agents and low level of security in the rural kiosks. However, evidence showed that the
Since 2009, several MicrofinanceInstitutions (MFI) in Kenya have been undergoing reform to enable them become deposit – taking financial institutions (FSD Kenya, 2014). The reforms have come by way of regulations referred to as prudential regulations of MFIs (CBK, 2013). The regulating authority has developed a number of guidelines as the frame work to determine the performance of the MFIs. Some of the guidelines are manageri- al in nature while others are financial. Cost of banking services is one among the many determinants that are thought to affect the financial performance of DTMFIs (Branker, Shackles & Pearce, 2011). Several studies in the world show that MFIs have experienced problems as they transform into deposit – taking microfinance in- stitutions (DTMFI) such as experienced in Uganda (Sridhar, 2015) and India (Bhandari, Amit & Kundu, 2014). The studies done show that transformation of MFIs had hardships which were financial, legal and managerial in nature (Hishigsuren, 2006). From reviewed literature cost has been identified as a determinant which has considerable contribution to MFIs performance from a developing country context like Kenya. According to Te- hulu, (2013) for MFIs to reach full potential they must become financially sustainable. Financial soundness also known as financial self-sustenance (FSS) and operational self-sustenance (OSS) which is measured as the ability of MFIs to continue operations indefinitely using own resources without dependence on other sources or sub- sidized loans from outside individuals, NGOs, or governments have to be attained. This study was therefore set out to establish the degree to which the cost of banking services as a determinant affects the financial perfor- mance of the DTMFI in Kenya.
microenterprises in Ghana and South Africa due to the different factors that may contribute to microenterprise performance. Ultimately, if a study finds out that a microenterprise has developed after receiving a microfinance loan, does that mean it was as a result of the loan? May be no. There are other possible factors that can explain the improvement (Setboonsarng and Parpiev, 2008). For example, it maybe that management drive in the beneficiary microenterprise is stronger than the non- beneficiary microenterprise. In which case, the beneficiary will do better with or without the loan. Again, the scope of a microfinancestudy is what determines the choice of research method and explains what is being observed (Wampfler, et al., 2006). Therefore, there is also a question about whether available positive microfinance studies are macro or micro level analyses. One major drawback of levels of analysis is that for instance, a macro study on microfinance impact may support that access to credit contributes to poverty reduction in households. Unfortunately, such macro level analysis may conceal the corresponding hikes in family inequalities that this credit may create. According to Gibson and Mace (2007) often in countries such as; Ethiopia, Mali, Ghana, Pakistan and Nigeria men that are out of poverty are encouraged to marry several women to reflect their prosperity. Moreover, in some cases, girls of school going age in countries such as India, Bangladesh, Indonesia and Sri-Lanka are forced to concentrate on house chores whilst, the women manage their newly set-up businesses (Beaman, et al., 2012). Furthermore, most microfinance impacts are qualitative in nature and Wampfler, et al. (2006) have argued that it is difficult to quantify non-numeric information. For instance, how can a study analyse whether women entrepreneurs are henceforth capable of imagining that they are entitled to make their own choices. Better still, how can a study quantify the fact that a group of businesses have now been mobilised and that this same group is now ready to make its own choices? The experimental data, analysis and outcomes in this regard may be controversial rather than certain.
GIS plays an important role in animal husbandry. They are also carrying the responsibilities like training the farmers and professionals, strengthening of semen stations, Organization of infertility camps, to deliver breeding inputs at farmer’s door steps. Until recently significant efforts are put in the direction of livestock survey and data generation by various agencies. These data should be given a Geo- informatics approach / direction, which will result in deriving lotof information from the existing surveyed data. Development & implementation of Web-GIS based Livestock Information Management System (WGLIMS) is very much essential to collect, analyze, model, visualize and disseminate data available on livestock in India. Use of GIS can handle and analyze spatially referenced data and offers tremendous potential in storing voluminous spatial and non- spatial data. By employing GIS, GPS and remote sensing technologies advantages can be sought not only in time and costs, but also in a more comprehensive and integrated treatment for affected areas and their restoration, in a mainly agrarian economy of developing country like India. (Sajeevanet. al., 2012)