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Objectives, Principles, Role Of Mf


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Objectives, Principles, Role Of Mf

  1. 1. Objectives & Role of MF By: Shazia Abbas
  2. 2. <ul><li>“ Money, says the proverb, makes money. When you have got a little, it is often easy to get more. The great difficulty is to get that little” </li></ul><ul><li>Adam Smith . </li></ul>
  3. 3. Objectives <ul><li>to stop exploitation of the poor caused by expensive informal credit; </li></ul><ul><li>to provide small loans to poor people at relatively lower cost as compared to accessible informal loans; </li></ul><ul><li>to finance economically and socially viable projects those cannot be financed otherwise; </li></ul>
  4. 4. Objectives…. <ul><li>to empower women within households as decision makers and in society through active economic participation; </li></ul><ul><li>to create maximum employment opportunities; </li></ul><ul><li>to create self sufficient and self-employed people </li></ul>
  5. 5. Objectives…. <ul><li>and the most importantly; to reduce poverty, accelerate growth </li></ul><ul><li>and improve the living standards on sustainable basis. </li></ul>
  6. 6. How Micro Finance Works
  7. 7. Women Empowerment - ↑ In female economic participation - Gender equality -↑ Role in family decisions -↓ Fertility rate -↑ in family well being Microcredit Target poorest segment of society Increase in employment Rise in Income level Small population Size Better provision of health and education Services - Better nutrition - Health opportunities ↑ - Access to education ↑ -Increase in productivity -↑ in per capita income Improvement in living standards Increase in consumption of goods and services Aggregate Demand ↑ -↑ in investment and Employment opportunities -Aggregate Supply↑ The economy grows and poverty declines
  8. 8. Principals of MF <ul><li>Poor people need a variety of financial services, not just loans </li></ul><ul><li>Microfinance is a powerful tool to fight poverty </li></ul><ul><li>Microfinance means building financial systems that serve the poor . </li></ul>
  9. 9. <ul><li>Microfinance can pay for itself, and must do so if it is to reach very large numbers of poor people . </li></ul><ul><li>Microfinance is about building permanent local financial institutions . </li></ul><ul><li>Microcredit is not always the answer. Microcredit is not the best tool for everyone or every situation . </li></ul>Principals of MF
  10. 10. <ul><li>Interest rate ceilings hurt poor people by making it harder for them to get credit. </li></ul><ul><li>The role of government is to enable financial services, not to provide them directly . </li></ul><ul><li>Donor funds should complement private capital, not compete with it . </li></ul>Principals of MF
  11. 11. <ul><li>The key bottleneck is the shortage of strong institutions and managers . </li></ul><ul><li>Microfinance works best when it measures—and discloses—its performance . </li></ul>Principals of MF
  12. 12. Thank You