Role Of Microfinance Institutions Research Articles

The role of microfinance institutions during the COVID-19 pandemic

The role of microfinance institutions during the COVID-19 pandemic

Role of microfinance institutions in enhancing street vending business in India

This study aims to analyze how the variables of financial inclusion, access to capital, and financial awareness regarding Microfinance Institutions have impacted the economic empowerment of street vendors in India. Street vending is one of the most prominent facets of the informal economy in India. However, there is a lack of economic understanding among street vendors, resulting in a lack of knowledge and awareness about microfinance services. The absence of knowledge about MFI schemes creates difficulties for street vendors in accessing finance for their business operations. The three independent variables utilized in the study are financial inclusion, access to capital, and financial awareness, respectively, with economic empowerment of street vendors as the dependent variable. Quantitative data has been collected through the use of standard research instruments. Primary data were collected from 393 street vendors in South India and were analyzed using AMOS. It is evident that financial inclusion, access to finance, and financial awareness regarding MFIs have an impact on the economic empowerment of street vendors. This research provides insights into how street vendors in India can optimally utilize microfinance services with the aim of empowering them economically.

Capital Convertibility: Empowerment Strategy For Micro-Entrepreneurs In Babelan Village, North Bekasi Regency

This study examines capital convertibility in Huripjaya Village, Babelan District, North Bekasi Regency. Capital convertibility refers to the ability of capital or economic resources to switch between forms or sectors to improve people's welfare. The main objective of this study is to analyze the dynamics of capital convertibility, the factors that influence it, and its impact on village development. The research method used is a combination of literature studies, field observations, and interviews with key stakeholders in Huripjaya Village. The results showed that the convertibility of capital in this village was influenced by internal and external factors, including geographical conditions, natural resources, institutions, and regional economic development. Factors such as economic diversification, the role of microfinance institutions, and community involvement in local decision-making play an important role in increasing capital convertibility. In addition, the existence of community economic training and education programs was also identified as a factor that contributed positively to economic structural changes in Huripjaya Village. In the context of development impacts, this study presents findings that increasing capital convertibility can make a significant contribution to improving the welfare of rural communities. This can be seen from the increase in population access to better health services, education, and infrastructure. This research provides valuable insights for policy makers, local governments, and other relevant parties to design more effective and sustainable development strategies at the village level.

A Study on Role of Micro Finance Institutions in Financial Autonomy of Women with reference to We-Care Charitable Trust, Bengaluru

A Study on Role of Micro Finance Institutions in Financial Autonomy of Women with reference to We-Care Charitable Trust, Bengaluru

The role of microfinance institutions on women’s entrepreneurship development

This study investigates the role of microfinance services on women's entrepreneurship development in Assosa town. The study employed both descriptive and explanatory designs and a quantitative research approach. The study targeted 352 women clients of Assosa Woreda Microfinance Institution, and 165 samples were selected using a simple random sampling technique. The data were collected through a questionnaire and analyzed through the statistical package for social science (SPSS) 26 software. The findings from the descriptive mean analysis indicate that the microfinance institution financial and non-financial services offered were found unable to significantly empower disadvantaged and poor women by improving their livelihood and development of their business. The correlation result also indicated a positive and significant association between saving practice, access to credit, skill development training, and the development of women entrepreneurs. Finally, the regression result saving and the credit or loan services of the microfinance institution service have the most decisive influence on women's entrepreneurship development.

Assessing the Impact of Microfinance Schemes to Meet the Challenging Needs of Women in Human Resource Development: Sagnarigu Municipality as a Case Study

The role of microfinance institutions in the economy cannot be over emphasized. It cannot be disputed that microfinance institutions give the needed support to increase productivity among the targeted groups. This research work is aimed at assessing the impact of microfinance schemes to meet the challenging needs of women in human resource development in the Sagnarigu Municipality. The study adopted a descriptive cross-sectional survey for this purpose and both simple random method (lottery or chance method) and purposive sample technique were used to achieve representativeness. Data sources in this study include primary and secondary data, and, questionnaire and interview guide were used to collect data from 55 respondents. The findings indicate that microfinance assists very poor families and communities with basic needs and protect households, communities and most especially women against risk and decision making. The study recommended that; the processing of the microfinance loans should be timely to enable women utilize the facility when it is most needed.

THE MODEL FOR IMPROVING BUSINESS PERFORMANCE USING MICROFINANCIAL INSTITUTIONS AND ENTREPRENEURSHIP COMPETENCIES

This paper will assess & present empirical evidence on the issue in order to better understand how Microfinance Institutions (MFIs) mediate entrepreneurial talents. The role of MFIs is evaluated based on their functions as a source of finance, facilitators for financial management, managerial management, and marketing management. Sales growth, profit growth, asset growth, employee growth, and market share growth are all ways to gauge a company’s performance. While entrepreneurial ability is assessed using technical, marketing, financial, and interpersonal abilities. The research approach is explanatory, with data collected through questionnaires and interviews. A sample of 150 SMEs sampled the population of 34,816 SMEs in West Java’s Greater Bandung region, Indonesia, using a proportionate random sampling approach. Structural Equation Modeling and a 5-point Likert scale were used to analyze the data collected (SEM). According to the findings, microfinance institutions can help businesses succeed by a small but significant amount. Business performance is positively and significantly impacted by entrepreneurial talents. The MFIS’s significance in influencing entrepreneurial skills expands in relation to corporate performance.

Role of microfinance institutions in women empowerment in Uttar Pradesh

Role of microfinance institutions in women empowerment in Uttar Pradesh

Climbing the economic ladder: The role of microfinance institutions in promoting entrepreneurship in Pakistan

AbstractFinancial inclusion has received widespread attention from policymakers and researchers in recent years and is viewed in most macroeconomic studies as an engine of economic growth. By contrast, analyses at the micro‐level have largely focused on microcredit rather than microfinance and reached more ambiguous conclusions. In particular, the literature concurs on the modesty of the impact of such programmes on poverty, if any. In this paper, we examine the effect of access to microfinance rather than microcredit only, as other financial services, such as savings for instance, can be put to the same use as credit by loosening constraints on investment or helping poor households to withstand shocks. Using nationally representative micro‐data from Pakistan, we provide evidence that having geographical access to a microfinance institution raises the likelihood for an individual to move from a low‐earning occupation such as being a salaried employee, farm worker or even a housewife to a more profitable entrepreneurship status. The effect is stronger in poorer regions, even after accounting for the nonrandom opening of financial branches. We conclude that financial inclusion should be further regarded as an effective ally in the fight against poverty.

Aksesibilitas Perempuan Terhadap Lembaga Keuangan Mikro

The role of microfinance institutions in boosting the people's economy is urgently needed. Providing access to microfinance is considered one of the key programs for efforts to eradicate poverty, especially since so far the poor have faced many obstacles in accessing other banking systems or institutions. One of the microfinance products rolled out is PT. Permodalan Nasional Madani Mekaar (PT. PNM Mekaar) which was established in 2015 with more than 10.8 million customers. This research was conducted with the aim to find out how customers' perceptions of PT. PNM Mekaar and its contribution to micro business income before and after getting financing. The sample is entrepreneurs who are classified as micro businesses who are PNM Mekaar customers in Medan, Johor, totaling 43 customers. The data used are primary data, sourced from the results of distributing questionnaires and secondary sources from the Central Statistics Agency (BPS), the Financial Services Authority (OJK). This method uses descriptive analysis method and inductively with paired difference test. The results showed that there was a significant influence between the income of Micro and Small Enterprises before and after obtaining financing from PT. PNM Mekaar

Microfinance Institutions as a Vehicle for Poverty Eradication in Developing Countries: Evidence from the East African Community Member States

This paper focuses on examining the link that exists between microfinance institutions (MFIs) and poverty eradication efforts in developing countries, specifically focusing on the East African member states of Burundi, Democratic Republic of Congo (DRC), Kenya, Rwanda, South Sudan, Tanzania, and Uganda. The study was driven by the varying interpretations, debates, and opposing opinions in literature on the effects of MFIs on poverty eradication in developing economies, particularly in the East African Community (EAC). The study used a depth literature search using secondary data on the role of MFIs in poverty eradication in the EAC context. The results pointed out that despite the challenges such as high transaction rates, limited funding and others, microfinance credit has played a significant role in poverty eradication among poor/low-income families in the EAC Member States. Therefore, the study recommends that governments of the EAC Member States should increase government support, and conducive working environments should be provided to ensure microfinance institutions reach as many less privileged individuals as possible so as to raise their economic status.

The role of microfinance institutions in enhancing the sustainability of women-owned SMMES

Microfinance plays a catalytic role in the sustainability of small, micro, and medium enterprises (SMMEs). Given the prevailing failure rate of SMMEs in South Africa, a holistic view of microfinance institutions (MFIs) regarding microfinance is essential. This paper explores how MFIs enhance women-owned SMMEs’ sustainability in the Gqeberha area focusing on three MFIs subsidized by the South African government in Nelson Mandela Bay municipality. Systems theory was used to explore areas that MFIs should focus on to enhance the sustainability of women-owned SMMEs. A qualitative case study using semi-structured interviews and open-ended questionnaires was employed. The research sample was drawn from three public MFIs in Gqeberha and 21 women-owned SMMEs who are beneficiaries of the MFIs. Coding and thematic analysis were used for data analysis. MFIs encounter challenges in adequately servicing women-owned SMMEs. A mismatch was identified in the provision and demand of microfinance services due to limited funding for MFIs. The non-financial support essential to keeping SMMEs afloat does not meet the needs of women-owned businesses. The microfinance services provided by MFIs play a significant role in supporting SMMEs to achieve sustainability. However, there is a need for a complementary service that should offer sector-specific business support because current services provided by the MFIs are generic, and SMMEs need sector-specific assistance. AcknowledgmentsOur special thanks go to the Department of Development Studies and Nelson Mandela University for the support that contributed to the success of this manuscript. We also acknowledge Dr. Ruth Albertyn for her technical and editorial support.

PENGARUH INKLUSI KEUANGAN DAN PERAN LEMBAGA KEUANGAN MIKRO TERHADAP KINERJA UMKM DI KECAMATAN SEBERANG ULU I KOTA PALEMBANG

This study aimed to determine the effect of financial inclusion and the role of microfinance institutions on the performance of MSMEs in Seberang Ulu I District, Palembang city. This study used quantitative methods, namely by presenting research results in the form of number sorstatistics to test hypotheses. The population of this research was MSME actorsin Seberang Ulu I District, Palembang cityas many as 436 units. The sample in this study was 173 units. This study used quantitative analysis methods. The data used in this study was primary data obtained from filling out questionnaires conducted by respondents. Then the data was processed using multiple liner analysis techniques, based on the results of the analysis showed that the variables of Financial Inclusion and the Role of Microfinance Institutions had an effect on the performance of MSMEs. It was proven by the results of the analysis of the coefficient of determination where the variable of Financial Inclusion and Microfinance Institutionson MSME Performance was 56% and the remaining 44% was in fluenced by other variables not mentioned in this study.

The role of microfinance institutions on poverty reduction in Ethiopia: the case of Oromia Credit and Saving Share Company at Welmera district

The purpose of this study is to assess the contribution of Oromia Credit and Saving Share Company microfinance institution on poverty alleviation in Welmera district, Oromia Special Zone Surrounding Finfine, Oromia Regional State, Ethiopia. Both random and purposive sampling techniques were used for data collection. Three hundred and fifty-seven respondents were selected from twelve different villages for the data collection. The study used a binary logistic regression to identify the key determinants of the income improvement of respondents. The findings confirmed that education level, voluntary saving, and utilization of loan for the intended purposes are statistically significant and positively contributed to the income improvement of the respondents in the study area. The finding revealed that most of the respondents' income improved after they joined the program which impacted positively in improving their standards of living.

Financial inclusion and the performance of microfinance institutions: does social performance affect the efficiency of microfinance institutions?

PurposeThe purpose of this study is to evaluate whether focus on social output affects the efficiency of MFIs. Inclusive growth is the key developmental aim for many developing countries, including India. The role of microfinance institutions (MFIs) in promoting financial inclusion is widely applauded. However, to achieve financial sustainability, MFIs have become highly commercialised and are seen to have drifted away from their social mission. Various studies have shown the efficiency of MFIs on financial parameters. MFIs being a social enterprise, it is important to include social output among the efficiency parameters.Design/methodology/approachThis study attempts to compare the efficiency of MFIs with and without social performances across the various size of MFIs based on their asset, i.e. large, medium and small. This study uses Data Envelopment Analysis (DEA) for assessing an MFI’s efficiency. For calculating the social output score, the Gutman Scale is used. Efficiency is calculated with and without social output, and the resulting scores are compared to assess the impact of social performance on the efficiency of MFIs.FindingsThe results of this study allow us to conclude that with the inclusion of social output, the efficiency of MFIs improves across various categories. In terms of social performances, it is concluded that MFIs are targeting women and mostly working in rural areas but have neglected issues like health and education.Originality/valueThe findings of this study will help MFIs in formulating their mission and vision statements and in achieving the objective of financial inclusion without experiencing mission drift.

Natural Disasters and Economic Growth: The Mitigating Role of Microfinance Institutions

In this study, we explore whether microfinance institutions (MFIs) can mitigate the adverse macroeconomic consequences of natural disasters. The provision of capital immediately following a natural event is recognized as one of the necessary conditions for a fast economic recovery. However, one concern is that a large majority of natural disasters occur in developing countries where households and the private sector have only limited access to the formal banking system. As an alternative, MFIs may fill up this gap in providing liquidity in the form of microcredit. The existing evidence on how MFIs respond to disaster effects is foremost based on case and micro-level evidence. In turn, the focus of this study is more on the macro impact of MFI activities after a natural disaster. Based on the finding obtained from an OLS-FE model using an unbalanced panel considering more than 80 developing countries and emerging economies, we can conclude that natural disasters harm macroeconomic performance primarily through their effect on the agricultural sector. However, access to lending facilities from MFIs mitigates a large part of this negative effect. Moreover, the extent to which MFIs are able to mitigate these effects depends to a great extent on their nature, i.e., their organizational structure, profitability, legal status, age, and the number of clients they serve.

The role of microfinance in funding Small & Medium Enterprises: Harekello Town of Goro Dolla District in Focus, Ethiopia

This study examines the role of the Microfinance on funding of the Small and Medium Enterprises (SMEs) in Gorodola Harakallo town. This study was exploring the role of microfinance institutions on small and medium enterprise as well as the extent to which the small business have benefited from the credits scheme of microfinance institution. The specific objectives of this study were as follows; to determine at what extent role of microfinance lead to increase the volume of gross sales of participants and to understand other factors that affect SME’s growth. This study tries to answer two important questions: To what extent does microfinance lead to increase the growth of sale costumer? What are the factors that affect small and medium enterprise growth? The literature review also describes the objectives and function of MFIs, role of microfinance policy, development and policy of SMEs challenges and opportunity and relationship between MFIs and SMEs. With regard to the above objectives in mind, the research is carried out by gathering primary data through questionnaires and interviews with key informants. In addition, secondary sources of data have also been used. Eventually, using a mix of qualitative and quantitative tools, the study found out that SMEs have played positive role in improving income, creation of employment and improving the quality of life of the participants of the enterprises in the study area.

The Role of Micro Finance Institutions on the Development of Micro Enterprises (MEs) in Sri Lanka

Aim: The study investigates the impact of microfinance practices on the growth of micro-enterprises (MEs) concerning the Central Province, Sri Lanka. It has been discovered that the growth of microbusinesses is dependent on gender, age, education level and nature of the industry.
 Design/Methodology/Approach: Multinomial Logistic Regression models was applied in this study. Multinomial logistic regression is frequently used for the analysis of categorical response data with continuous or categorical explanatory variables. Parameter estimates are usually obtained through direct maximum likelihood estimation. Two models were used to test the hypothesis concerning the three practices, micro-credit, training and advisory services. Primary data were obtained from 200 registered microenterprises (ME) owners in the Central Province through convenience sampling methods. Data collection was conducted using a self-structured questionnaire.
 Results and Conclusion: According to the results, microfinance practices have a significant relationship with the development of MEs, while Microcredit and advisory services have a significant impact on the development of MEs. Training programmes have not significantly impacted on the development of MEs. The research concludes that microfinance as a whole educates and helps to develop micro financed micro-scale enterprise businesses and positively impact those families in the Central Province, Sri Lanka.
 Research limitations/implications: Data were limited to select only one province in Sri Lanka out of nine using a self-structured questionnaire. Also considering the response rate and sample size, there are limitations to generalize the findings. This research was restricted to three variables micro-credit; Training and Advisory services impact of other factors that can influence the growth of MEs did not fall under the scope of this study.
 Originality and Value: The impact of microfinance practices on MEs growth in Central Province in Sri Lanka is an under-researched area of study. The findings of this study can act as a guideline in the future for decision-makers to identify factors that influence more on MEs development.

Comparative Analysis of Beef Cattle Farms Performance Before and After the Existence of Microfinance Institutions

The existence of Microfinance Institutions (MFIs) in rural areas is one solution for farmers in general, including beef cattle farmers. The limitation of capital ownership in farmers is one of the factors that cause the number of livestock ownership is also relatively small and low feed quality. The existence of MFIs expected can encourage the motivation of farmers in running their livestock business, increase income-generating and cattle ownership. This study aimed to examine the differences in revenue and cattle owned between before and after the farmer joined in the MFIs. Data collection using a questionnaire. This research was explanatory research and uses comparative test analysis. The results of the study showed that there were differences in farmers’ revenue and the number of cattle ownerships before and after joining the MFIs. This was due to the presence of capital or funds that can be accessed from informal funding institutions, generally, farmers used these funds to buy better breed, improve feed quality hence, it affected the performance of cattle production. This condition can affect the amount of cattle ownership and revenue obtained by farmers. Therefore, the role of MFIs was very large for the development of livestock businesses in rural areas.

What Explains the Overwhelmingly Positive Perception towards Microfinance Institutions? Application of Firth’s Logistic Regression in a Small Sample

This paper focuses on analyzing small-sample business survey data. We survey 129 businesses in Nepal, where a majority of businesses express an overwhelmingly positive perception towards microfinance institutions (MFIs). The survey focuses mainly on how businesses perceive the services provided by local MFIs. In order to address the bias in maximum likelihood estimation in the context of small sample size, we utilize Firth’s adjusted maximum likelihood estimation procedure in the application of logistic regression. The results show that it is the borrowing of a loan from an MFI, not the actual business performance, which influences a business owner’s perception towards the role of MFIs in various aspects of rural development. While there is no strong evidence of the MFI loans helping with the actual business performance, and thereby influencing the perceptions, we discuss the potential benefits of owning a business that may be contributing to the positive perceptions towards the institutions with which they are associated. These findings have important implications from the managerial perspective of both MFIs and governing institutions in developing countries.