THE AWARENESS OF MICRO FINANCE IN DEVELOPING ECONOMIES AND ITS IMPACT

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ACKNOWLEDGEMENT

No words can express my appreciation and gratitude to my research advisor _______ through the course of this research, Professor _____has taught me numerous values that extend well beyond the realm of _________ (Your Subject Name). His emphasis on dedication to work and his valuable and practical insights of life are some of the major highlights of my education at The University _________.

DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for the academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

Table of Contents

ACKNOWLEDGEMENTii

DECLARATIONiii

A. Background Section1

Review of Literature1

Impact on Household6

The Effect of Microfinance on Poverty7

B. Industry Background9

C. Research aim, research questions or hypotheses and objectives9

Aims and objectives of the study9

Research questions10

Hypothesis10

D. Research Methodology11

Research approach used in this study11

Justification of using mixed method to research11

Secondary data search12

Research Method12

Population13

Sampling frame13

Sampling procedure13

E. Timescale14

Gantt chart14

Time Scale15

F. Resources16

References17

The Awareness of Micro Finance in Developing Economies and Its Impact

A. Background Section

Review of Literature

Microcredit is a method for providing small amounts of capital to poor people so that they can improve their existing income-generating activities, or develop new ones, and is widely used in developing countries. It is based on the principle of providing credit to individuals within a group, where each person in the group is mutually responsible for the credit repayment of the other members. This social collateral removes the need for physical collateral, which poor people generally lack. The term 'microcredit' has changed into 'microfinance' (MF) in recent times due to its wider role, as microfinance adds the provision of savings and insurance services to that of credit.

The development of the microfinance sector is based on the assumption that the poor possess the capacity to accomplish income-generating economic activities but are limited by lack of access to and inadequate provision of savings, credit, and insurance facilities. The microfinancial services capture the various financial needs of the poor, and currently microfinance is a major component of poverty reduction and economic regeneration strategies around the world. As a concept, microfinance pays close attention to the incentives that drive efficient performance in the context of small transactions and large numbers of clients. Most of the institutions in microfinance are based on group-based lending approaches and thus reduce the administrative costs of gathering information, contract design, and enforcement of credit transactions, including loan recovery (Braverman, 1996, 1253-1267). Recently, the microfinance sector has come more into the domain of commercial organizations and the idea of sustainable microfinance has become an integral part of the development of financial markets in many countries.

Microfinance activities usually involve (1) small loans, (2) informal appraisal of borrowers and investments, (3) collateral substitutes such as group savings or compulsory savings, (4) access to repeat and larger loans, based on repayment performance, (5) streamlined loan disbursements and monitoring, and (6) secure ...