This study of financial institutions and its impact of economic growth in Somalia have been used to the following variables to analyze how financial institutions and economic growth are related to each other. Bank, remittance “Hawala” and microfinance institutions, Gross domestic production, employment rate and national income are independent and dependent variables respectively that we have analyzed.
Financial literacy is a major determinant of demand for financial services. This study sought to
determine the levels of financial literacy of informal Enterprise owners and to establish the link with Enterprise
usage of financial services, and at the same time to determine socio-demographic and Enterprise characteristics
that may affect levels of financial literacy, and Enterprises’ usage of financial services
The document discusses the declining role of World Bank lending in middle-income countries and proposes ways to address the problem. It notes that World Bank lending to MICs has significantly declined in recent decades. While MICs still face development challenges, the Bank is constrained in supporting them. There are many reasons for the lending decline, including shifts in Bank priorities and procedures. Progress has been made to facilitate more lending, but more can be done, such as expanding financial intermediation lending and adapting instruments for sub-national governments.
International Financial Institutions, Middle East, North Africa a primer for ...Dr Lendy Spires
Preface What is this primer? The purpose of this Primer is to shed light on the operations and impacts of international financial institutions (IFIs) that are active in the Middle East and North Africa (MENA), such as the World Bank and the International Monetary Fund, and to reveal how individuals and communities can hold those institutions accountable. The Primer aims at helping civil society groups in the region to more actively and critically engage with those IFIs in setting the development agenda and shaping policies and investments in their countries. What is the “MENA region”? BIC’s MENA program considers the region to be made up of the following predominantly Arabic-speaking countries: Morocco, Algeria, Tunisia, Libya, Egypt, West Bank and Gaza, Jordan, Syria, Lebanon, Iraq, Kuwait, Bahrain, Qatar, United Arab Emirates, Oman, Yemen, and Saudi Arabia. BIC also includes Iran and Israel within its MENA program. However, the countries defined as “MENA” vary from one institution to another, either for political reasons or simply because of the geographic mandate of the institution. The table on Page 6 shows the countries considered part of the MENA region by each IFI discussed in this Primer. The wide range of economic and political conditions of the countries in the MENA region means that relations with IFIs vary considerably from one government to the next. Conflict-affected countries such as Lebanon, Iraq and Palestine, depend to a great extent on IFIs for financing and coordination of donor activities. A smaller number of the region’s countries that are considered “poor”, like Yemen, also rely fairly heavily on financing from IFIs. However, most countries in MENA are considered “middle income countries” by IFIs, and thus are not eligible for grants or the lowest-interest loans that the institutions offer. These countries are also better able to turn to other sources like private banks and commercial investors, to borrow money. Still other countries in the region are world-renowned for their oil riches, and thus are actually in the position of being “donor” countries rather than borrowers at
The document discusses microfinance in the Philippines. Microfinance provides small loans and savings services to help poor and small business owners manage their finances. It aims to help people escape poverty by providing financial access. Many developing countries have large numbers of self-employed workers who lack access to traditional banking services. Microfinance institutions fill this need by offering small, risk-managed loans. The document also discusses the growth potential of the finance industry in the Philippines given factors like population growth, a young workforce, growth in industries like business process outsourcing, and infrastructure development.
This document analyzes whether microfinance institutions (MFIs) adequately address barriers to financial inclusion in India. It finds that while MFIs break down many barriers, their outreach is limited in some ways. First, MFI penetration across India is uneven, excluding some areas neglected by banks, indicating a need for policies to encourage expansion. Second, within areas they operate, MFIs are unable to serve some financially excluded individuals due to their operating methods. To provide greater long-term access, MFIs may need more flexible models, portable accounts, and skills training.
This document discusses financing for small and medium enterprises (SMEs) and its importance for economic development. It notes that SMEs contribute significantly to employment and GDP in many economies. However, access to financing is a major constraint on SME growth, with an estimated credit gap of $1.2-$2.6 trillion globally. The document then outlines both public and private sector initiatives to help bridge this gap and support SME financing. It also discusses traditional debt-based approaches and newer approaches like asset-based financing, alternative debt instruments, equity, and hybrid instruments. It emphasizes the need to educate SMEs about different financing options suited to their lifecycle stages.
Is Foreign Debt A Problem Of BangladeshRayees Aryan
This document discusses external debt and foreign aid in developing countries, specifically Bangladesh. It provides background on external debt, how it is incurred by governments and includes money owed to other governments and international financial institutions. It then discusses the debt of developing countries, how some levels of debt accumulated following the 1973 oil crisis when prices increased. It also notes that while some funds went to infrastructure, a proportion was lost to corruption or spent on arms. The document discusses debates around cancelling developing country debts and reasons for and against cancellation. It provides an overview of foreign aid received by Bangladesh since independence, including key sectors aided. It discusses types of aid including grants, loans, food aid and project aid. It concludes by discussing perspectives on the relationship between
The effectiveness of the international financial system in advancing sustaina...SDGsPlus
The document discusses the effectiveness of the international financial system in advancing sustainable development. It notes that while financial flows to developing countries have increased to around $1 trillion annually, this is not enough to finance the UN Sustainable Development Goals. It highlights that official development assistance has remained steady, but private sector resources and remittances have increased substantially in recent years. The document also examines areas like international financial regulation, reducing remittance costs, attracting foreign direct investment, and the need to focus on official development assistance, domestic resource mobilization, and harnessing the private sector to sustainably finance development.
Financial literacy is a major determinant of demand for financial services. This study sought to
determine the levels of financial literacy of informal Enterprise owners and to establish the link with Enterprise
usage of financial services, and at the same time to determine socio-demographic and Enterprise characteristics
that may affect levels of financial literacy, and Enterprises’ usage of financial services
The document discusses the declining role of World Bank lending in middle-income countries and proposes ways to address the problem. It notes that World Bank lending to MICs has significantly declined in recent decades. While MICs still face development challenges, the Bank is constrained in supporting them. There are many reasons for the lending decline, including shifts in Bank priorities and procedures. Progress has been made to facilitate more lending, but more can be done, such as expanding financial intermediation lending and adapting instruments for sub-national governments.
International Financial Institutions, Middle East, North Africa a primer for ...Dr Lendy Spires
Preface What is this primer? The purpose of this Primer is to shed light on the operations and impacts of international financial institutions (IFIs) that are active in the Middle East and North Africa (MENA), such as the World Bank and the International Monetary Fund, and to reveal how individuals and communities can hold those institutions accountable. The Primer aims at helping civil society groups in the region to more actively and critically engage with those IFIs in setting the development agenda and shaping policies and investments in their countries. What is the “MENA region”? BIC’s MENA program considers the region to be made up of the following predominantly Arabic-speaking countries: Morocco, Algeria, Tunisia, Libya, Egypt, West Bank and Gaza, Jordan, Syria, Lebanon, Iraq, Kuwait, Bahrain, Qatar, United Arab Emirates, Oman, Yemen, and Saudi Arabia. BIC also includes Iran and Israel within its MENA program. However, the countries defined as “MENA” vary from one institution to another, either for political reasons or simply because of the geographic mandate of the institution. The table on Page 6 shows the countries considered part of the MENA region by each IFI discussed in this Primer. The wide range of economic and political conditions of the countries in the MENA region means that relations with IFIs vary considerably from one government to the next. Conflict-affected countries such as Lebanon, Iraq and Palestine, depend to a great extent on IFIs for financing and coordination of donor activities. A smaller number of the region’s countries that are considered “poor”, like Yemen, also rely fairly heavily on financing from IFIs. However, most countries in MENA are considered “middle income countries” by IFIs, and thus are not eligible for grants or the lowest-interest loans that the institutions offer. These countries are also better able to turn to other sources like private banks and commercial investors, to borrow money. Still other countries in the region are world-renowned for their oil riches, and thus are actually in the position of being “donor” countries rather than borrowers at
The document discusses microfinance in the Philippines. Microfinance provides small loans and savings services to help poor and small business owners manage their finances. It aims to help people escape poverty by providing financial access. Many developing countries have large numbers of self-employed workers who lack access to traditional banking services. Microfinance institutions fill this need by offering small, risk-managed loans. The document also discusses the growth potential of the finance industry in the Philippines given factors like population growth, a young workforce, growth in industries like business process outsourcing, and infrastructure development.
This document analyzes whether microfinance institutions (MFIs) adequately address barriers to financial inclusion in India. It finds that while MFIs break down many barriers, their outreach is limited in some ways. First, MFI penetration across India is uneven, excluding some areas neglected by banks, indicating a need for policies to encourage expansion. Second, within areas they operate, MFIs are unable to serve some financially excluded individuals due to their operating methods. To provide greater long-term access, MFIs may need more flexible models, portable accounts, and skills training.
This document discusses financing for small and medium enterprises (SMEs) and its importance for economic development. It notes that SMEs contribute significantly to employment and GDP in many economies. However, access to financing is a major constraint on SME growth, with an estimated credit gap of $1.2-$2.6 trillion globally. The document then outlines both public and private sector initiatives to help bridge this gap and support SME financing. It also discusses traditional debt-based approaches and newer approaches like asset-based financing, alternative debt instruments, equity, and hybrid instruments. It emphasizes the need to educate SMEs about different financing options suited to their lifecycle stages.
Is Foreign Debt A Problem Of BangladeshRayees Aryan
This document discusses external debt and foreign aid in developing countries, specifically Bangladesh. It provides background on external debt, how it is incurred by governments and includes money owed to other governments and international financial institutions. It then discusses the debt of developing countries, how some levels of debt accumulated following the 1973 oil crisis when prices increased. It also notes that while some funds went to infrastructure, a proportion was lost to corruption or spent on arms. The document discusses debates around cancelling developing country debts and reasons for and against cancellation. It provides an overview of foreign aid received by Bangladesh since independence, including key sectors aided. It discusses types of aid including grants, loans, food aid and project aid. It concludes by discussing perspectives on the relationship between
The effectiveness of the international financial system in advancing sustaina...SDGsPlus
The document discusses the effectiveness of the international financial system in advancing sustainable development. It notes that while financial flows to developing countries have increased to around $1 trillion annually, this is not enough to finance the UN Sustainable Development Goals. It highlights that official development assistance has remained steady, but private sector resources and remittances have increased substantially in recent years. The document also examines areas like international financial regulation, reducing remittance costs, attracting foreign direct investment, and the need to focus on official development assistance, domestic resource mobilization, and harnessing the private sector to sustainably finance development.
This document discusses microfinance and its role in economic development. It outlines various microfinance products like microcredit, microsavings, microinsurance, and remittance management that provide small loans, savings opportunities, insurance, and money transfer services to the poor. Microfinance aims to reduce poverty and promote financial inclusion, domestic savings, risk protection, and new business growth. The document also discusses the Grameen Bank microcredit model and social enterprises applying microfinance principles. While microfinance has helped many, some argue it has limits and risks if not implemented as part of a broader development strategy.
The Role of Multilateral Development Banks (MDBs) in the 2030 AgendaMarc-Anton Pruefer
This presentation provides: i) an overview of the 2030 Agenda and the Sustainable Development Goals (SDGs), ii) the order of magnitude of the associated financing needs, iii) the sources of development finance, focusing on iv) Multilateral Development Banks (MDBs) and their financing instruments, and v) a comparison of the major MDBs. It is targeted at both laypeople and professionals and seeks to convey a “big picture” of what Development Finance is, why the SDG period (2016-2030) is different from the MDG period (2000-2015), and what the role of different MDBs could be in achieving the 2030 Agenda.
The document discusses trends in the microfinance industry globally and in India. Key points:
- Microfinance institutions (MFIs) have played a large role in addressing financial inclusion, though 2 billion people still lack access to financial services.
- Growth has been uneven globally, with some regions slowing down due to economic factors while Asia/Africa are growing. However, significant potential remains as financial exclusion is still widespread.
- In India, while inclusion has increased, banks have traditionally not focused on lower income groups. MFIs emerged to address this need, though their role in the ecosystem has changed over time.
Reimagining Finance and Development in TanzaniaNate Wood
This document provides an analysis of microfinance in Tanzania and introduces an organization called Cheetah Development (CD) that aims to address limitations of traditional microfinance models. CD uses innovative financing models called Metafinance and Micro Venture Capital that provide larger loans to small and medium enterprises. This addresses the "missing middle" between microloans and larger venture capital. CD also invests in companies addressing inefficiencies in agricultural value chains in Tanzania. The document argues that CD has the potential to stimulate more substantial economic growth compared to traditional non-governmental organizations through what it calls "Transformational Entrepreneurship."
Mainstreaming Islamic Finance into Global InitiativesSDGsPlus
The document discusses how investing in inclusive growth can help countries meet the UN Sustainable Development Goals (SDGs). It outlines that the SDGs present a major opportunity for transformation if countries invest in areas like human capital, infrastructure, social protection, and resilience. The role of the financial sector, including Islamic finance, in mobilizing savings and allocating investments to support the SDGs is also examined. Specific financial instruments like sustainability bonds and sukuk are highlighted as ways to finance initiatives across education, health, and infrastructure to boost sustainable development.
The document discusses Nigeria's microfinancing strategy established by the Central Bank of Nigeria to address poverty and lack of access to capital for small businesses. The strategy licenses two categories of microfinance banks - unit MFBs operating in a single local government area and state MFBs operating within a state - and establishes requirements for capitalization, growth, and expansion. The goal is to promote a private sector-driven microfinancing system delivered through regulated and well-managed microfinance banks.
Financial Institutions and Market (Direct State Intervention)Farman Zakhilwal
This chapter discusses different ways governments intervene in banking and credit markets, including through state-owned banks and credit guarantee schemes. It notes that state banks were created to fill market gaps and provide SME financing. Countries used different approaches, from expanding lending by state banks to implementing credit guarantee programs. The chapter also discusses debates around the merits of direct government intervention versus relying on market forces. It analyzes the role of several countries' state banks and credit schemes in mitigating the impacts of economic crises.
Department of accounting and finance, mekelle university, ethiopiaAlexander Decker
This document summarizes a study that assessed the determinants of micro and small enterprises' (MSEs) access to finance in Asella, Ethiopia. The study used a survey of 134 MSEs and binary logistic regression to identify factors that affect MSEs' ability to access credit from formal financial institutions. The results showed that older operators, higher levels of education, possession of fixed assets, larger employment size, and positive attitudes towards lending procedures and repayment periods increased the likelihood of obtaining credit. Considering the important role of MSEs, all stakeholders should help improve their access to financing.
FINANCIAL LITERACY, CASH MANAGEMENT AND BUSINESS GROWTH IN KAMPALA CITY COUNC...ectijjournal
The study sought to establish the relationship between financial literacy, cash management and business growth in Kampala city council authority. The study design used was descriptive and correlation in nature. The study revealed a moderately high level of financial literacy, a moderate level of cash management and a moderately high level of business growth among the businesses investigated. Financial literacy confirmed in adequate knowledge on how to expand and capitalize money in addition to warranting a portion of their regular income saved in assets. It was noted that most businesses grow out of paying their debtors promptly, using loaned capital efficiently and perhaps cash planning practices. In the long run, most businesses end up into bankruptcy associated to using borrowed funds for improving standards of living. It is a common practice in Uganda for one to emerge as a promising investor, live a posh life and registered in bankruptcy within less than a decade of his business career. The study recommended that the Private Sector Uganda, Uganda Manufacturers’ Association, Uganda Chamber of Commerce; and other trade organizations should include training business men and women around the country on sound financial management. There is need to further sensitize the public and business owners in particular on the risks associated with borrowed capital. Business owners should further avoid running for credit because it is cheap and available. Business owners should always align their borrowed capital with business objectives lest they divert funds intended for business growth into improving their standards of living by spending lavishly.
The document summarizes research about the mass affluent market in Canada and the US. It defines mass affluents as individuals with $100,000-$1,000,000 in liquid financial assets. In Canada, there are over 2 million mass affluents, with the largest numbers in Ontario and Toronto. They tend to be professionals between $100,000-$150,000 income. Mass affluents save more than they spend, worry about funding education and retirement, and prefer low-risk investments. In the US, there are 30 million mass affluent households that own 37% of liquid assets, with most located in the South.
1) Mission drift occurs when microfinance institutions (MFIs) prioritize profitability over their original social goals of alleviating poverty. This often happens as MFIs transform into regulated banks to attract more funding and scale up operations.
2) Many factors can contribute to mission drift, including pressure from profit-seeking investors, uncertainty around subsidy funding, and MFIs' own desire to cut costs and serve wealthier clients.
3) MFIs can avoid mission drift by implementing strong internal management systems, including clear social performance metrics, communication of social goals to employees, and governance to ensure priorities stay aligned with the original poverty-focused mission. External actors like donors and investors also must encourage MFI
Multidisciplinary Journal Supported by TETFund. The journals would publish papers covering a wide range of subjects in journal science, management science, educational, agricultural, architectural, accounting and finance, business administration, entrepreneurship, business education, all journals
1) The globalization of China's financial industry is key to supporting the global expansion of Chinese enterprises. While Chinese commercial banks began expanding overseas in the early 2000s, more financial institutions increased overseas investments after 2009.
2) Overseas direct investment from China sharply increased between 2007 and 2009, driven by demand from non-financial industries, increased investments from China Investment Corporation during the financial crisis, and opportunities to acquire undervalued foreign assets.
3) For Chinese financial institutions to further expand globally, they need to adjust their business models, increase profits from capital markets, and better adapt to serving the needs of Chinese enterprises investing overseas. Strong government support is also needed to address issues around foreign exchange reserves and capital injections.
FDI as A Source of External Finance to Developing Countries: A Special Refere...iosrjce
In this era of increasingly globalized world economy, FDI is particularly a significant driving force
behind the interdependence of national economies and is considered as the main source of external finance. The
considerable decline in official development assistance (ODA) and commercial bank lending to developing
countries, which are considered as the main sources of meeting the external financing needs of developing
countries, have seen a greater reliance on private capital especially foreign direct investment as a source of
development finance. This is because of the fact that FDI not only remains much less volatile than portfolio and
other investments but it has also proved to be resilient enough during East Asian crisis of 1997-98 and the
Mexican crisis of 1994-95. In view of this growing significance of foreign direct investment, this paper aims to
study the role of FDI in external financing to developing countries, particularly India and China and the
benefits of combining FDI with other private sources of external finance. The paper concludes that FDI is the
major source of external finance for developing economies not only in absolute terms but also relative to other
sources of private capital flows, contributing on an average more than half of net private and official flows
during the period under review. The findings also presented a completely different picture with regard to the
structure of external financing for India and China. For China, FDI is the major external source of finance
followed by debt. On the other hand, for India Workers’ Remittances is the major source of external finance
followed by debt. The paper further concludes that China and India are the first and third most developing
country destinations for investment flows respectively and both are vying with each other to attract more and
more FDI inflows.
This document discusses debt, debt forgiveness, and governance as enabling conditions for debt forgiveness as a form of foreign aid. It reviews literature on why countries take on public debt, the effectiveness of foreign aid, and major debt crises like the 1982 Latin American debt crisis and 1997 Asian Financial Crisis. The document performs a literature review on debt and governance factors that influence the amount of debt forgiveness a country receives. It hypothesizes that better macroeconomic conditions and governance are related to higher levels of debt forgiveness.
The document discusses sustainable development goals and financing development. It explains that development can be financed through various sources like grants, loans, equity investments, and guarantees. Low-income countries rely more on grants and concessional loans while middle-income countries use regular loans. Domestic resource mobilization is raising funds domestically through taxation and savings but Ghana faces issues like tax evasion and corruption that hinder development financing. Improving tax administration through computerized online systems could help address these issues and boost development funding.
Regulating Islamic Banking : A Malaysian PerspectiveLokesh Gupta
This paper provides an insight of importance of regulations and supervisory structures for Islamic Banking System. This builds up public confidence and ensure well-being of the Economy. It also covers the various initiatives taken by the Central Bank of Malaysia for Islamic Banks to counter future risks and to maintain financial stability in the financial sector.
Global Business Issue_Islamic Finance_Article critiqueWafeeqa Wafiq
The document discusses Islamic finance in Malaysia and the challenges faced by Islamic financial institutions (IFIs) locally and globally. It notes that Malaysia has been a leader in Islamic finance since the 1950s and is responsible for 60% of global sukuk issuance. However, IFIs face challenges including limited recognition, products not being fully promoted internationally, and lack of regulation in some countries. To overcome these challenges, IFIs need to improve communication, develop new investment innovations, and establish dialogue to foster understanding between different cultures.
Banking on Change - Breaking the Barriers to Financial InclusionDr Lendy Spires
This document discusses barriers to financial inclusion for billions of people globally. It identifies common barriers such as lack of financial literacy, gender and age discrimination, low and unpredictable income, lack of suitable banking products, geographic distance from banks, and restrictive national policies. These barriers are self-perpetuating as they have led banks to focus on more profitable client segments, leaving poor communities isolated from formal banking. The Banking on Change partnership aims to address this challenge by linking savings groups to formal bank accounts, and has already reached over 500,000 savings group members in just three years.
This document discusses microfinance and its role in economic development. It outlines various microfinance products like microcredit, microsavings, microinsurance, and remittance management that provide small loans, savings opportunities, insurance, and money transfer services to the poor. Microfinance aims to reduce poverty and promote financial inclusion, domestic savings, risk protection, and new business growth. The document also discusses the Grameen Bank microcredit model and social enterprises applying microfinance principles. While microfinance has helped many, some argue it has limits and risks if not implemented as part of a broader development strategy.
The Role of Multilateral Development Banks (MDBs) in the 2030 AgendaMarc-Anton Pruefer
This presentation provides: i) an overview of the 2030 Agenda and the Sustainable Development Goals (SDGs), ii) the order of magnitude of the associated financing needs, iii) the sources of development finance, focusing on iv) Multilateral Development Banks (MDBs) and their financing instruments, and v) a comparison of the major MDBs. It is targeted at both laypeople and professionals and seeks to convey a “big picture” of what Development Finance is, why the SDG period (2016-2030) is different from the MDG period (2000-2015), and what the role of different MDBs could be in achieving the 2030 Agenda.
The document discusses trends in the microfinance industry globally and in India. Key points:
- Microfinance institutions (MFIs) have played a large role in addressing financial inclusion, though 2 billion people still lack access to financial services.
- Growth has been uneven globally, with some regions slowing down due to economic factors while Asia/Africa are growing. However, significant potential remains as financial exclusion is still widespread.
- In India, while inclusion has increased, banks have traditionally not focused on lower income groups. MFIs emerged to address this need, though their role in the ecosystem has changed over time.
Reimagining Finance and Development in TanzaniaNate Wood
This document provides an analysis of microfinance in Tanzania and introduces an organization called Cheetah Development (CD) that aims to address limitations of traditional microfinance models. CD uses innovative financing models called Metafinance and Micro Venture Capital that provide larger loans to small and medium enterprises. This addresses the "missing middle" between microloans and larger venture capital. CD also invests in companies addressing inefficiencies in agricultural value chains in Tanzania. The document argues that CD has the potential to stimulate more substantial economic growth compared to traditional non-governmental organizations through what it calls "Transformational Entrepreneurship."
Mainstreaming Islamic Finance into Global InitiativesSDGsPlus
The document discusses how investing in inclusive growth can help countries meet the UN Sustainable Development Goals (SDGs). It outlines that the SDGs present a major opportunity for transformation if countries invest in areas like human capital, infrastructure, social protection, and resilience. The role of the financial sector, including Islamic finance, in mobilizing savings and allocating investments to support the SDGs is also examined. Specific financial instruments like sustainability bonds and sukuk are highlighted as ways to finance initiatives across education, health, and infrastructure to boost sustainable development.
The document discusses Nigeria's microfinancing strategy established by the Central Bank of Nigeria to address poverty and lack of access to capital for small businesses. The strategy licenses two categories of microfinance banks - unit MFBs operating in a single local government area and state MFBs operating within a state - and establishes requirements for capitalization, growth, and expansion. The goal is to promote a private sector-driven microfinancing system delivered through regulated and well-managed microfinance banks.
Financial Institutions and Market (Direct State Intervention)Farman Zakhilwal
This chapter discusses different ways governments intervene in banking and credit markets, including through state-owned banks and credit guarantee schemes. It notes that state banks were created to fill market gaps and provide SME financing. Countries used different approaches, from expanding lending by state banks to implementing credit guarantee programs. The chapter also discusses debates around the merits of direct government intervention versus relying on market forces. It analyzes the role of several countries' state banks and credit schemes in mitigating the impacts of economic crises.
Department of accounting and finance, mekelle university, ethiopiaAlexander Decker
This document summarizes a study that assessed the determinants of micro and small enterprises' (MSEs) access to finance in Asella, Ethiopia. The study used a survey of 134 MSEs and binary logistic regression to identify factors that affect MSEs' ability to access credit from formal financial institutions. The results showed that older operators, higher levels of education, possession of fixed assets, larger employment size, and positive attitudes towards lending procedures and repayment periods increased the likelihood of obtaining credit. Considering the important role of MSEs, all stakeholders should help improve their access to financing.
FINANCIAL LITERACY, CASH MANAGEMENT AND BUSINESS GROWTH IN KAMPALA CITY COUNC...ectijjournal
The study sought to establish the relationship between financial literacy, cash management and business growth in Kampala city council authority. The study design used was descriptive and correlation in nature. The study revealed a moderately high level of financial literacy, a moderate level of cash management and a moderately high level of business growth among the businesses investigated. Financial literacy confirmed in adequate knowledge on how to expand and capitalize money in addition to warranting a portion of their regular income saved in assets. It was noted that most businesses grow out of paying their debtors promptly, using loaned capital efficiently and perhaps cash planning practices. In the long run, most businesses end up into bankruptcy associated to using borrowed funds for improving standards of living. It is a common practice in Uganda for one to emerge as a promising investor, live a posh life and registered in bankruptcy within less than a decade of his business career. The study recommended that the Private Sector Uganda, Uganda Manufacturers’ Association, Uganda Chamber of Commerce; and other trade organizations should include training business men and women around the country on sound financial management. There is need to further sensitize the public and business owners in particular on the risks associated with borrowed capital. Business owners should further avoid running for credit because it is cheap and available. Business owners should always align their borrowed capital with business objectives lest they divert funds intended for business growth into improving their standards of living by spending lavishly.
The document summarizes research about the mass affluent market in Canada and the US. It defines mass affluents as individuals with $100,000-$1,000,000 in liquid financial assets. In Canada, there are over 2 million mass affluents, with the largest numbers in Ontario and Toronto. They tend to be professionals between $100,000-$150,000 income. Mass affluents save more than they spend, worry about funding education and retirement, and prefer low-risk investments. In the US, there are 30 million mass affluent households that own 37% of liquid assets, with most located in the South.
1) Mission drift occurs when microfinance institutions (MFIs) prioritize profitability over their original social goals of alleviating poverty. This often happens as MFIs transform into regulated banks to attract more funding and scale up operations.
2) Many factors can contribute to mission drift, including pressure from profit-seeking investors, uncertainty around subsidy funding, and MFIs' own desire to cut costs and serve wealthier clients.
3) MFIs can avoid mission drift by implementing strong internal management systems, including clear social performance metrics, communication of social goals to employees, and governance to ensure priorities stay aligned with the original poverty-focused mission. External actors like donors and investors also must encourage MFI
Multidisciplinary Journal Supported by TETFund. The journals would publish papers covering a wide range of subjects in journal science, management science, educational, agricultural, architectural, accounting and finance, business administration, entrepreneurship, business education, all journals
1) The globalization of China's financial industry is key to supporting the global expansion of Chinese enterprises. While Chinese commercial banks began expanding overseas in the early 2000s, more financial institutions increased overseas investments after 2009.
2) Overseas direct investment from China sharply increased between 2007 and 2009, driven by demand from non-financial industries, increased investments from China Investment Corporation during the financial crisis, and opportunities to acquire undervalued foreign assets.
3) For Chinese financial institutions to further expand globally, they need to adjust their business models, increase profits from capital markets, and better adapt to serving the needs of Chinese enterprises investing overseas. Strong government support is also needed to address issues around foreign exchange reserves and capital injections.
FDI as A Source of External Finance to Developing Countries: A Special Refere...iosrjce
In this era of increasingly globalized world economy, FDI is particularly a significant driving force
behind the interdependence of national economies and is considered as the main source of external finance. The
considerable decline in official development assistance (ODA) and commercial bank lending to developing
countries, which are considered as the main sources of meeting the external financing needs of developing
countries, have seen a greater reliance on private capital especially foreign direct investment as a source of
development finance. This is because of the fact that FDI not only remains much less volatile than portfolio and
other investments but it has also proved to be resilient enough during East Asian crisis of 1997-98 and the
Mexican crisis of 1994-95. In view of this growing significance of foreign direct investment, this paper aims to
study the role of FDI in external financing to developing countries, particularly India and China and the
benefits of combining FDI with other private sources of external finance. The paper concludes that FDI is the
major source of external finance for developing economies not only in absolute terms but also relative to other
sources of private capital flows, contributing on an average more than half of net private and official flows
during the period under review. The findings also presented a completely different picture with regard to the
structure of external financing for India and China. For China, FDI is the major external source of finance
followed by debt. On the other hand, for India Workers’ Remittances is the major source of external finance
followed by debt. The paper further concludes that China and India are the first and third most developing
country destinations for investment flows respectively and both are vying with each other to attract more and
more FDI inflows.
This document discusses debt, debt forgiveness, and governance as enabling conditions for debt forgiveness as a form of foreign aid. It reviews literature on why countries take on public debt, the effectiveness of foreign aid, and major debt crises like the 1982 Latin American debt crisis and 1997 Asian Financial Crisis. The document performs a literature review on debt and governance factors that influence the amount of debt forgiveness a country receives. It hypothesizes that better macroeconomic conditions and governance are related to higher levels of debt forgiveness.
The document discusses sustainable development goals and financing development. It explains that development can be financed through various sources like grants, loans, equity investments, and guarantees. Low-income countries rely more on grants and concessional loans while middle-income countries use regular loans. Domestic resource mobilization is raising funds domestically through taxation and savings but Ghana faces issues like tax evasion and corruption that hinder development financing. Improving tax administration through computerized online systems could help address these issues and boost development funding.
Regulating Islamic Banking : A Malaysian PerspectiveLokesh Gupta
This paper provides an insight of importance of regulations and supervisory structures for Islamic Banking System. This builds up public confidence and ensure well-being of the Economy. It also covers the various initiatives taken by the Central Bank of Malaysia for Islamic Banks to counter future risks and to maintain financial stability in the financial sector.
Global Business Issue_Islamic Finance_Article critiqueWafeeqa Wafiq
The document discusses Islamic finance in Malaysia and the challenges faced by Islamic financial institutions (IFIs) locally and globally. It notes that Malaysia has been a leader in Islamic finance since the 1950s and is responsible for 60% of global sukuk issuance. However, IFIs face challenges including limited recognition, products not being fully promoted internationally, and lack of regulation in some countries. To overcome these challenges, IFIs need to improve communication, develop new investment innovations, and establish dialogue to foster understanding between different cultures.
Banking on Change - Breaking the Barriers to Financial InclusionDr Lendy Spires
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Financial Institution on Economic Growth in Somalia
1. Mr. Daud DahirHassan
MBA – Islamic Finance
1
IMPACT OF FINANCIAL INSTITUTIONS ON
ECONOMIC GROWTH IN SOMALIA
1.0 Introduction
Generally financial institutions play a vital role for economic growth, so it is one of most priorities. financial
institution is a term refersfor the combination of banks,remittances “Hawala” and microfinance institutions
each of them plays an important position for the process of economic growth. In the last two decades the
link between financial institution (FI) and Economic growth has generated a great deal of interest among
academics, policy makers and economists around the world. Financial institutions become much more
effectives and plays vital character for economic growth. In black continent Africa it’s same as the other
parts of the world even if it’s less developed and there is a lack of valuable financial institution which plays
important part for the economic growth but in Somalia since the centralgovernment was collapsed in 1991
the overall economic of the country was declined although financial institutions especially the remittances
“Hawala” take part in the economic growth in punt-land and in Somalia generally.
This study of financial institutions and its impact of economic growth in Somalia have been used to the
following variables to analyze how financial institutions and economic growth are related to each other.
Bank, remittance “Hawala” and microfinance institutions, Gross domestic production, employment rate
and national income are independent and dependent variables respectively that we have analyzed.
1.1 Problem ofthe study and Research Objectives
The problem to be directed is around the poor financial institutions and in some instancesimproper financial
service offered by poor financial institutions in Somalia, this normally results to failure of economic growth.
Deficiencies in the financial institutions are the major cause of poor economic growth Ellison and Orozco
(2007). Are the Financial institutions in a position to influence the economic growth of the state? Lack of
existence of important part of financial institutions including; credit union, insurance companies, mutual
fund, pension fund and many others in a building up market can lead the economy to decline.
This paper will analyze how effective and successful financial institution will bring economic growth in
punt-land and how it will contribute the improvement of the economic in the state. One of the most critical
obstacles to financial institutions is informality. The poor often live and work in the informal sector,lacking
legal ownership of land, homes and business. Half of Somalia people live in informal settlement in urban
area alone, meaning that they cannot use their land as collateral on a loan; often they lack address they
could associate with a bank account or credit application. Entrepreneurs can face high fees,inefficient and
sometimes corrupt procedures,and burdensome regulation that essentially make it too costly to incorporate
legally the result are enforce contract or declare bankruptcy.
The main research objectives of this study is to assess the impact of Financial institutions on economic
growth in Somalia Hence, the specific research objectives of this paper are:
To examine the relationship between banks and economic growth in Somalia.
To establish the effect of remittances “Hawala” on economic growth in Somalia.
To examine the relationship betweenthe microfinance institutions and economic growth in Somalia.
2. Mr. Daud DahirHassan
MBA – Islamic Finance
2
2.0 Literature review
Speciously, Somalia’s banking and financial system has been heavily impacted by the political confusion
that has engulfed the country’s recent history. Consequently, there are no proper functioning banks in
Somalia, although certain money remittance companies claim to be banks and provide some basic financial
services.
Historically in recent years the number of commercial banks in Somalia was massively increasing, this
encourages the habit of saving and investing and it increases the liquidation and mobilization of resources
in the market (Poutziouris, 2013)
Since the collapse of the Somali state and economy in the 1990s, Somalia hasbecome even more dependent
on remittances from family members working abroad. Today, remittances are by far the largest solitary
source of hard currencyentering the country, and are vital to the country’s limited ability to feedand sustain
itself. One study estimates that remittances to Somaliland alone (which is home to about 1/6 of the total
population in Somalia, which is estimated at about fifteen million people) reachasmuch asUS $500 million
per year – two times the value of livestock exports in a normal year (Ahmed, 2000). Another study
calculates that remittances constitute nearly 30% of the income of urban households in the northern towns
of Hargeisa, Burao, and Bosasso. Remittances to southern Somalia are less well-documented.
Mogadishu is unquestionably the largest recipient of remittances; it probably accrues a similar level of
remittancesas doesSomaliland. In the town of BeledWeyn, with a population of about 50,000, an estimated
US $200,000 per month is received in remittances, for a monthly average of US $4 per town dweller. Our
best estimates are that remittances nationally probably total somewhere between One billion to 1.3 billion
US dollars per year (Toure, 2016)
Microfinance institutions in Somalia Despite the many benefits, microfinance institutions face a range of
challenges that limit their reach,especially in predominantly Muslim countries. One challenge is providing
microfinance services under sharia, or Islamic law, which restricts the charging of interest for loans. Certain
banks and microfinance institutions started to provide microfinance service for poor people including
Somali Development and Reconstruction Bank and many others but the main challenge they face was
absence of proper functioning financial legal framework and lack of trust among the beneficiaries.
Microfinance is already enabling some of the poorest Somalis to plan for the future and to be more resilient
to the shocks of conflict and famine. The expertise of companies like Dahabshiil and their experience of
working in such regions will be essential if these innovations are to live up to their early promise (CEO D.
D., 2012)
2.1 Role Banks can play Economic growth
Banks are financial intermediaries that accept deposits and make loans. Banks offer several advantages in
connecting borrows and lenders. By pooling the funds of thousands of different depositors they are able to
make large loans beyond the meansof any individual investor. In addition, because theydeal in such a large
volume of loans, their costs to making a loan are smaller than for a single investor. Banks make a variety
of different kinds of loans. They lend money to businesses for capital improvement projects, called
commercial and industrial loans. They lend money to consumers for projects such asauto and college loans,
called consumer loans, and also to purchase a house, called a real estate loan, or a mortgage. Banks make
profits by the spread between the interest rate on the loan that they make and on the deposits that they take
(thiel, 2001).
2.2 Role ofRemittance ofEconomic growth
The alternative remittance system or Hawala operates outside of, or parallel to conventional banking or
financial institutions. It was developed in India, before the introduction of Western banking practices, and
is now a major remittance system used around the world (Sandhu, 2001). This system of remittance is no
3. Mr. Daud DahirHassan
MBA – Islamic Finance
3
longer referred to as an "underground banking", as it is now operating with full legitimacy and it is openly
advertised in a variety of media, such as ethnic newspapers and Internet websites.
The major distinctive feature of this informal banking system that differentiates it from other forms of
remittance systems is trust and the extensive use of connections such as family or clan relationships in the
processes of money transactions. Trust is therefore a very important component in Hawala banking system.
It is now well established that Hawala firms are honest and trustworthy in their dealings with their
customers. Breaches of trust are extremely uncommon and rare. Hawala are informal money transfer
companies that Transfer funds both domestically and internationally.
2.3 Role ofMicrofinance on Economic Growth
Lesser-developed economies do not have access to financial technologies because perspective borrowers
lack collateral; institutions do not want to pay high monitoring, screening, and enforcement costs; and
because risks are very high in populations that suffer from severe illness, malnutrition, and low levels of
education. Microfinance is a wide variety of economic interventions that aim to improve poor people’s
access to financial technologies.
The model of the Grameen (Village) Bank of Bangladesh is the most well-known and discussed model in
the literature. Muhammad Yunus, a Bangladeshi economist who founded the Grameen Bank in 1976, won
the 2006 Nobel Peace Prize. As of 2007, the bank has 7.3 million members in over 74,000 villages. Total
assets are nearing $1 billion, the recovery rate is 98.4%, and profits are at $20 million. The distinguishing
features of the Grameen model are joint liability, forced savings, and ‘non-financial products’ that aim to
change the social and economic infrastructure of Bangladesh and other poor countries (Levine, 2012).
Achieving balanced and inclusive economic growth is a key challenge faced by policymakers in countries
around the world.
3.0 Research Methodology
A descriptive researchdesign ware usedto get a deeperinformation and high analytical approach to develop
solutions, purposive and simple random selection wasconducted on Somalis who metthe researchselection
criterion such as financially literacy, current political awareness,business connection, strong Somali roots
and were resident in Somalia. The sample size for the study was (N= 25) In total we had 17 questions in
our study. The researcher used interview and questionnaire research instruments which are structured set
of questions designed to generate the information required for specific purpose which is suitable in large
population with short time
3.1 Population and Sampling of the study
The targetpopulation for this study is totaled to sixty individuals with different qualifications from different
institutions. While the sample size will be 25 individuals coming from different sections of the selected
study population.
Table1: Population and Sampling of the Study
Stakeholders
Study population Target Population
Male Female Male Female
Government sectors 8 4 3 2
Financial institutions 12 6 2 3
Business sectors and households 6 9 3 4
Education and research centers 7 8 5 3
Sub Total 33 27 13 12
Total 60 25
4. Mr. Daud DahirHassan
MBA – Islamic Finance
4
4.0 Result and Findings
4.1 Profile of Respondents
This section gives the characteristics of the respondents in cross tabulations and graphs in relation to job
title, highest level of education, gender and age of the respondents.
Profile of Respondents Frequency percentage
Gender
Male 13 52%
Female 12 48%
Age
26 - 35 10 40%
36 - 45 10 40%
45- 55 3 12%
Above 55 2 8%
Marital Status
Single 10 40%
Married 12 48%
Divorce 2 8%
Widowed 1 4%
Educational Level
Certificate 2 8%
Diploma 4 16%
Bachelor Level 10 40%
MasterLevel 9 36%
Table2: It is observed that the 52% of the respondents were males since there was 48% female of
the respondent. While number of male respondents were 13 out of 25 participants as well as female
respondent number was 12. Regarding to the age of respondents is it showed that 40% of the population
ware between 26 to 35 and 36 to 45 where 12% ware between 45 to 55 and the remaining 8% was above
55 which means only two participants ware above that age. Concerning the marital status shows that the
40% of the respondent were single which means 10 of total respondents, where 48% of the respondents
were married which means 12 of total respondent and where 8% of the respondent were Divorced which
means2 and other remaining participants were 4% waswidowed which means 1 persons of the respondents.
This table also indicates that the majority of the respondents are Bachelor level, 40% of the participants
were Bachelor degree level. While 36% of them were master level, and the 16% of were diploma and
remaining 8% were secondary level students.
4.2 Research findings
The first objective of this study wastoexamine the relationship betweenbanks and economic growth
in Somalia. All the relevant variables were tested as mentioned earlier and the results revealed that banks
play significant role in economic growth and majority of respondents strongly agreed that since the central
government collapsed the state doesn’t have legally and properly working central banking so the economic
situation and supply of money in the market was not noble as well as the state doesn’t have internationally
recognized bank therefore it resulted for economic decline however absence of development it plays an
effective role for economic reject.
5. Mr. Daud DahirHassan
MBA – Islamic Finance
5
The second objective of the study was to establish the effect of remittances “Hawala” on economic
growth in Somalia. The result indicates that the majority of participants strongly agreedthat there is a strong
relationship between remittances and economic growth knowing that for the last three decade remittances
wasplay animportant role for economic growth via sending the money from abroadto families and business
entities furthermore remittances help households to get money from their relatives in abroad to cover daily
life business firms send, receive and collect money using though the remittances.
The third objective of this study was to examine the relationship between the microfinance
institutions and economic growth in Somalia. All the relevant variables were testedtoachieve this objective.
Consequently, the results of the study reveal that microfinance institutions can be the most appropriate
method by which poverty can be eliminated, create jobs and opportunities although they are considered a
new phenomenon in Somalia.
5.0 Conclusion and Recommendations
In this paper, the researcher has explained the impact of financial institutions on economic growth in
Somalia, Financial institutions perform an important role in the development process, particularly
through their role in allocating resources to their most productive uses.
It is recommended to develop and implement legal financial framework and strategies to International
financial institutions and foreign investors. The state has to collaborate financial institutions to motivate
and mobilize society to build and increase the habit of society in banking and financial institutions.
Somali remittances in most countries do not have license to operate and send money but they have an
account from other banks to send money in Somalia so that the study will recommend them to take
license in order to transfer money in a legal way. The study will recommend International Financial
organization and other related bodies to help the state in order to improve the quality of existing
microfinance institutions and craft new ones.
References
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