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The success of Grameen Bank, which was started by Yunus Muhammad in Bangladesh has always been used as a demonstration of the creditworthiness of individuals that live in poverty and the possible positive socio-economic effect of microfinance. The Grameen Bank is popular for two practices of innovativeness; these are mainly serving female customers and giving loans to small groups or individuals that come together for common economical purposes, with shared liability that replaces monetary collateral. Being an approach that is market-based to fighting impoverishment, the focus of microfinance and microcredit is on the development of entrepreneurship and the expansion of self-employment (Abed, 2000). Presently, the institutions of microfinance serve about one hundred and fifteen million individuals. They have a close relationship with the customers, simplified processes and support extension to customers via group networks as well as some other resources, like a basic training on the repayment of loan. The industry has been highly diversified, reaching different sections of the society, though not usually reaching the poorest (Yunus and Weber, 2007). The providers also vary as they range from NGOs, cooperative unions, government and commercial banks, point-of-sale partners like post offices and shops, self-help groups and credit unions. Technology is increasingly assisting in the facilitation of access to the financial services and the reduction of costs of administration. The product portfolios are growing to encompass different kinds of insurance mechanisms and savings, remittance services and emergency loaning, demonstrating the rising recognition of the several financial empowerment’s dimensions.
The battle against the availability of credit markets and hence against high rates of interests that the moneylenders demand is not new. They use the power of information concerning the potential borrowers and require different rates of interest
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Business has a big contribution to society and with it comes big responsibility as well. Milton Friedman (1970) of the New York Times Magazine stated that: ‘The primary and only responsibility of business is to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud.’ With this, comes the aim of this paper to present the definition and relationship of business and society to entrepreneurship, capitalism and profit making.
On the contrary, news reports about poverty-stricken farmers committing suicide feature almost regularly in the newspapers even after the government recently waived off farmers' loan debts to the tune of over Rs. 60,000 crores (approximately US$ 15000 million).
Read more about microcredit and the Grameen Bank, founded by Muhammad Yunus to aid in community economic development: http://www.grameen-info.org/. Your essay assignment is to describe microcredit and explain how it is specifically designed to address the
In the recent times, micro credits and micro-credit institutions have become popular mechanisms of empowerment of underprivileged segment of society living in extreme poverty and sub human conditions in various parts of the world.
The commercial banks primarily
The origins of micro-finance is traceable to 1944, as cooperative movements by Germany’s Raiffeisen Society, and in England by Rochdale Pioneers. However, the term “micro-finance” became popular in the 1990s, in
In such condition, the connection between the interests rates and the availability of credit has unconditionally changed in such a manner that either the loan is fundamentally less than any quoted formal rate of interest or there stops to be a precise