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Microfinancing

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Micro financing

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Microfinancing

  1. 1. Micro- Financing
  2. 2. Plan Canada and micro financing support Plan is a global movement for change, mobilizing millions of people around the world to support social justice for children in developing countries. Founded in 1937, PLAN is one of the world’s oldest and largest international development agencies, working in partnership with millions of people around the world to end global poverty.
  3. 3. Microfinance Microfinance involves extending small loans, savings and other basic financial services to people that don’t currently have access to capital. It’s a key strategy in helping people living in poverty to become financially independent, which helps them become more resilient and better able to provide for their families in times of economic difficulty. Considering nearly half the world survives on less than $2 a day, microfinance is a vital solution.
  4. 4. Six benefits of microfinance: 1. Access Banks simply won’t extend loans to those with little or no assets, and generally don’t engage in the small size of loans typically associated with microfinancing. Microfinancing is based on the philosophy that even small amounts of credit can help end the cycle of poverty. 2. Better loan repayment rates Microfinance tends to target women borrowers, who are statistically less likely to default on their loans than men. So these loans help empower women, and they are often safer investments for those loaning the funds.
  5. 5. 3. Extending education Families receiving microfinancing are less likely to pull their children out of school for economic reasons. 4. Improved health and welfare Microfinancing can lead to improved access to clean water and better sanitation while also providing better access to health care. 5. Sustainability Even a small working capital loan of $100 can be enough to launch a small business in a developing country that could help the benefactor pull themselves and their family out of poverty..
  6. 6. 6. Job creation Microfinancing can help create new employment opportunities, which has a beneficial impact on the local economy.
  7. 7. Village Savings & Loans WHO? Youth and adults WHAT? A program that allows members to pool their money and resources and invest in each other’s initiatives, like selling rice, returning to school or buying livestock. WHY? These projects help people lift themselves out of poverty by helping them establish successful businesses. They also teach financial literacy and reinforce the benefits of working together to benefit everyone.
  8. 8. HOW? At each Village Savings and Loans Association (VSLA) meeting, the group focuses on business and loan proposals that have been put up for consideration. They then determine which individuals to loan money to. After a loan is given, it must be repaid within 3 months with a small amount of interest COMMUNITY BUILDING Members also give a small amount at each meeting to a "social fund". This fund is used when someone in the group has sudden unexpected expenses, like medical bills, special food for a family health issue or other emergency.
  9. 9. Plan’s involvement in Micro financing Hundreds of thousands of people achieve financial stability thanks to microfinance schemes facilitated by Plan through its partners, helping them protect their families from emergencies and plan for the future. Through small loans and savings schemes, Plan's microfinance programs offer assistance to the very poor with a special emphasis on access for women.
  10. 10. By providing access to financial resources and the opportunity to accumulate savings, PLAN microfinance schemes allow families greater flexibility in managing their resources to become more resilient and provide for their children. In Peru, for example, Plan’s work through partnerships has helped 8,000 families access financial services and receive educational support.
  11. 11. One partner is Arariwa, a non-governmental organization with expertise in microfinance projects. Together PLAN has helped bring village banks to rural areas of the Cusco region and complemented these services with educational projects on business management and children's and women's health. http://plancanada.ca/microfinance
  12. 12. Other Micro finance institutions KIVA KIVA is a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world
  13. 13. Kiva envisions a world where all people - even in the most remote areas of the globe - hold the power to create opportunity for themselves and others. Kiva believes providing safe, affordable access to capital to those in need helps people create better lives for themselves and their families
  14. 14. Since Kiva was founded in 2005:  1,215,780 Kiva lenders  $600,448,550in loans  98.79% repayment rate KIVA works with:  274 Field Partners  450 volunteers around the world  78 different countries
  15. 15. Total amount lent through Kiva: $600,448,550 Kiva Users: 1,803,808 Kiva Users who have funded a 1,215,780 loan: Borrowers funded through Kiva: 1,392,680 Number of loans made through Kiva: 754,788 Kiva Field Partners: 274 Countries where Kiva Field 78 Partners are located: Repayment rate: 98.79% Average loan size: $418.12 Average loans made per Kiva 10.14 lender: Statistics
  16. 16. Through Labs, Kiva provides crowd-sourced capital to relieve the cost constraints on new ideas. And together with this new breed of Kiva partners, Kiva is testing and developing new financial products for borrowers worldwide. Kiva’s approach is to see what works and share the results with a global audience. Ultimately, the hope is to get high-impact products to people who have been too long overlooked, and demonstrate their success to the global market. Challenges: Financing Agriculture: Creating flexible financing to help farmers overcome uncertainties. Closing the Energy Gap: Financing renewables to replace expensive dirty and dangerous sources of energy. Access to Education: Loans for students with promising futures but no credit history. Leveraging mobile technology: Lowering costs and expanding access with mobile-based business models. www.kiva.org
  17. 17. FINCA International FINCA’s mission is to provide financial services to the world’s lowest-income entrepreneurs so they can create jobs, build assets and improve their standard of living. FINCA’s vision is to be a global microfinance network collectively serving more low-income entrepreneurs than any other microfinance institution while operating on commercial principles of performance and sustainability. Organization  With headquarters in Washington, DC, FINCA reaches over 1.7 million clients through its 22 subsidiaries in Africa, Eurasia, the Middle East and South Asia, and Latin America. Our outreach is among the broadest and most comprehensive of today’s microfinance institutions.  /
  18. 18. Approach  When clients come to FINCA for a loan, most of them are already micro-entrepreneurs. They have enough experience to know that, without additional working capital, their odds of becoming or staying profitable and productive, or of making improvements in their lives, remain low. They are looking for a business loan, much like any other entrepreneur, but at a micro level.  For these small-scale businesses, even small amounts of capital can make a dramatic difference. A business loan of a few hundred dollars can enable micro-entrepreneurs to pay wholesale rather than retail prices for the goods they resell, or to buy with cash rather than on consignment, or acquire a more modern piece of essential equipment, turning their businesses into profitable, sustainable enterprises. This small increase in purchasing power can have an immediate impact on a client’s productivity and earnings. For other clients, having a safe and trusted place to store and save their daily revenue is most critical. All of these needs are met by FINCA.
  19. 19. FINCA provides clients with a wide range of the financial products and services that micro-entrepreneurs need including savings accounts; group and individual loans; credit life, short-term disability, and hospitalization insurance; and money transfers. These products vary by local demand, and they are adapted to comply with local regulations and culture. Each FINCA Subsidiary is run by a local team of professionals with intimate knowledge of their market, and it is this localized, client-driven approach that has made FINCA’s global expansion possible and so effective. FINCA is firmly committed to Client Protection and fair practices and maintains strict policies to ensure compliance. Our local loan officers are trained in FINCA’s mission, and dedicated to helping clients build successful businesses while ensuring that they are protected from unnecessary risks.
  20. 20. FINCA providing pathways out of Poverty http://www.fincacanada.org/

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