The Future of Microfinance: Difference between revisions
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== New Markets == | |||
:Currently microfinance institutions have long been focusing on low income countries but the future Microfinance institutions will venture into some new markets partially due to greater competition in current markets. A possibility for new markets would be large, emerging market countries that are experiencing rapid growth and financial system development. For example Brazil, Russia, India and China are key targets because of their possibility of great profit. | :Currently microfinance institutions have long been focusing on low income countries but the future Microfinance institutions will venture into some new markets partially due to greater competition in current markets. A possibility for new markets would be large, emerging market countries that are experiencing rapid growth and financial system development. For example Brazil, Russia, India and China are key targets because of their possibility of great profit. | ||
== Going Commercial == | |||
:Current trends point to a greater participation from investment institutions. Traditionally microfinance has been driven by social causes but more banks are participating because of the possibility of great profits. JP Morgan Chase, the third largest bank in America, has launched a micro-finance unit as part of its emerging markets strategy becoming the latest investment bank to enter the fast-growing sector. Early 2007, '''Morgan Stanley''' launched its Microfinance Institutions Group, and HSBC purchased a minority stake in Mexican micro-finance and low-income consumer finance lender Financiera Independencia SAB. Deutsche Bank also raised capital for lenders in developing countries by selling bonds. | :Current trends point to a greater participation from investment institutions. Traditionally microfinance has been driven by social causes but more banks are participating because of the possibility of great profits. JP Morgan Chase, the third largest bank in America, has launched a micro-finance unit as part of its emerging markets strategy becoming the latest investment bank to enter the fast-growing sector. Early 2007, '''Morgan Stanley''' launched its Microfinance Institutions Group, and HSBC purchased a minority stake in Mexican micro-finance and low-income consumer finance lender Financiera Independencia SAB. Deutsche Bank also raised capital for lenders in developing countries by selling bonds. | ||
== Field of Study == | |||
:Microfinance is also becoming a major area of study. All over the world top universities have began offering degrees and programs in Microfinance management. The Indian School of Microfinance for Women is an innovative college which strives to further the microfinance movement. Their vision is “to emerge as a unique school to strengthen and spread microfinance as a strategy for poverty alleviation through development of appropriate knowledge and skilled human resource.” The European Microfinance Programme (EMP), launched in 2005 and organized by 3 European Universities, Académie Wallonie-Bruxelles in Belgium, Université Paris-Dauphine in France and Wageningen University in the Netherlands was the first of its kind in Europe which has inspired other such programs such as Center for Microfinance Advice and Consulting at Fairfield University in Connecticut. | :Microfinance is also becoming a major area of study. All over the world top universities have began offering degrees and programs in Microfinance management. The Indian School of Microfinance for Women is an innovative college which strives to further the microfinance movement. Their vision is “to emerge as a unique school to strengthen and spread microfinance as a strategy for poverty alleviation through development of appropriate knowledge and skilled human resource.” The European Microfinance Programme (EMP), launched in 2005 and organized by 3 European Universities, Académie Wallonie-Bruxelles in Belgium, Université Paris-Dauphine in France and Wageningen University in the Netherlands was the first of its kind in Europe which has inspired other such programs such as Center for Microfinance Advice and Consulting at Fairfield University in Connecticut. | ||
== Innovative Ideas == | |||
:Greater competition among current microfinance leaders is also driving innovation within the industry. Prodem in Bolivia created a system which uses a combination of biometric fingerprint and Smart Cards to deliver services to its clients. By using fingerprinting and voice pattern recognition they have reduced fraud and error within the business and have reduced time wasted on forgotten passwords and account numbers. BASIX in India is reducing transportation expenses for its clients by offering tellers in manned phone booths. This decreases their staff costs and allows customers easy access to their services. | :Greater competition among current microfinance leaders is also driving innovation within the industry. Prodem in Bolivia created a system which uses a combination of biometric fingerprint and Smart Cards to deliver services to its clients. By using fingerprinting and voice pattern recognition they have reduced fraud and error within the business and have reduced time wasted on forgotten passwords and account numbers. BASIX in India is reducing transportation expenses for its clients by offering tellers in manned phone booths. This decreases their staff costs and allows customers easy access to their services. | ||
:[[Microfinance in Asia and Africa]] | |||
Written by Fausia Mahama | |||
:Sources | |||
:http://www.globalenvision.org/library/4/1051/1/ | |||
:http://www.microfinancegateway.com | |||
:http://www.solvay.edu/microfinance/ | |||
:http://www.cgap.org/portal/site/cgap/ | |||
Latest revision as of 23:16, 21 December 2007
Latest trends in Microfinance
- Microfinance institutions also known as M.F.Is have linked formal financial institutions, such as banks, and informal sources such as moneylenders and credit associations. Microfinance Institutions have evolved from informal institutions to now being part of the financial mainstream. Commercial Microfinance Institutions have been an important component in consolidating financial sectors by extending the benefits of financial services to the traditionally disadvantaged. In addition, in some countries, microfinance is the forerunner of the evolution of these nations' financial systems with deficient institutional infrastructures.
New Markets
- Currently microfinance institutions have long been focusing on low income countries but the future Microfinance institutions will venture into some new markets partially due to greater competition in current markets. A possibility for new markets would be large, emerging market countries that are experiencing rapid growth and financial system development. For example Brazil, Russia, India and China are key targets because of their possibility of great profit.
Going Commercial
- Current trends point to a greater participation from investment institutions. Traditionally microfinance has been driven by social causes but more banks are participating because of the possibility of great profits. JP Morgan Chase, the third largest bank in America, has launched a micro-finance unit as part of its emerging markets strategy becoming the latest investment bank to enter the fast-growing sector. Early 2007, Morgan Stanley launched its Microfinance Institutions Group, and HSBC purchased a minority stake in Mexican micro-finance and low-income consumer finance lender Financiera Independencia SAB. Deutsche Bank also raised capital for lenders in developing countries by selling bonds.
Field of Study
- Microfinance is also becoming a major area of study. All over the world top universities have began offering degrees and programs in Microfinance management. The Indian School of Microfinance for Women is an innovative college which strives to further the microfinance movement. Their vision is “to emerge as a unique school to strengthen and spread microfinance as a strategy for poverty alleviation through development of appropriate knowledge and skilled human resource.” The European Microfinance Programme (EMP), launched in 2005 and organized by 3 European Universities, Académie Wallonie-Bruxelles in Belgium, Université Paris-Dauphine in France and Wageningen University in the Netherlands was the first of its kind in Europe which has inspired other such programs such as Center for Microfinance Advice and Consulting at Fairfield University in Connecticut.
Innovative Ideas
- Greater competition among current microfinance leaders is also driving innovation within the industry. Prodem in Bolivia created a system which uses a combination of biometric fingerprint and Smart Cards to deliver services to its clients. By using fingerprinting and voice pattern recognition they have reduced fraud and error within the business and have reduced time wasted on forgotten passwords and account numbers. BASIX in India is reducing transportation expenses for its clients by offering tellers in manned phone booths. This decreases their staff costs and allows customers easy access to their services.
Written by Fausia Mahama
