Role of Micro Finance Essay Sample

To be an executive of today. theoretical survey is non plenty. It should be supported by practical which is necessary for the modern concern universe. In order to decide the duality between these two countries all the sections of the commercialism module in Chittagong University arranges term paper study in partial fulfilment of B. B. A plan. The completion of this plan is necessary for every pupil to finish his/her academic class. Term paper brings the pupils closer to the existent concern universe. It can besides assist them to confirm their cognition so that they can fix themselves to get down a successful calling. Throughout my term paper study as assigned by my section. I have tried to recognize these aims to the fullest. The chief focal point of my assignment was to cognize the Role of Micro Finance. I have collected all the information from web site. one-year publications and brochures. During this plan. I tried to introduce myself with the existent universe and national economic system and made an effort to accommodate its complexnesss with theoretical cognition. The format of the study is slightly similar this in the beginning. I have placed an executive sum-up that contains the effect of my findings during the plan. Then the first few subdivision high spot on the intent. range. methodological analysis and restriction of the survey. The gathered information and my all findings sing micro finance have been presented in the subsequent subdivisions.

I owe a profound sense of gratitude to my honest instructor. Professor Mrs. Jannat Ara Parveen. & A ; Mr. Shahadat Hossain. Department of Finance and Banking. University of Chittagong. whose possible counsel helps me to do it successfully. Finally. I would wish to state that my hardworking attempts would go successful when any interested individual will happen my study utile.

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Recognition

First of all I am thankful to the merciful and all-powerful ALLAH. who has enabled me to finish this study successfully on “Role of Microfinance for poorness relief of Bangladesh- a comparative survey. ” I feel huge pleasance and satisfaction in showing this term paper. which is in expiration of my B. B. A. plan. The addition of this paper depends on the part of many people. particularly who trim clip to portion their prudent art of judgment of virtues and mistakes and suggestions.

I owe a great trade of gratitude to my honest instructor Professor Mrs. Jannat Ara Parveen. & A ; Mr. Shahadat Hossain. He offered me changeless counsel and many insightful and constructive observations throughout the survey. Basically. his support. encouragement and handiness to discourse thoughts and jobs have contributed much in finishing this survey. He ever kept me on undertaking and indicating out me back to my term paper aims. I truly appreciate for his forbearance and high efficiency in steering me in a proper manner in carry oning this term paper. His friendly counsel and cooperation which is really rare inspired me to finish the whole work seasonably. He preserves my particular thanks.

I am besides thankful to all officers and staffs of Micro Finance Institutions ( IBBL and BKB ) who provided me some cardinal information in fixing this study. Besides. I thank our group members for their difficult working. encouragement and coaction in the success worthy completion of this outstanding instance survey.

Rationality

As a pupil of Department of. Finance and Banking. University of Chittagong. it is required to fix a term paper on a practical sector. For this I preferred to do a term paper on “Role of Microfinance for Poverty relief of Bangladesh”- comparative analysis between RDS of IBBL and BKB.

Microfinance is one of the most of import subjects in the present universe. In the 3rd universe state like Bangladesh Microfinance is a really of import instrument to relieve poorness. Most of the population in our state lives below the poorness line. The coming of MFIs in our state is non so long. After the Liberation war assorted MFIs started their activities to assist the hapless economically. And now- a- yearss many MFIs operate in our state. Now- a -days Microfinance becomes an of import instrument in the economic system of 3rd universe state like Bangladesh. For this ground a desire grew in my head to cognize decently about Microfinance. MFIs. their activities and their success in our state.

And as a pupil of Finance & A ; Banking. I should decently cognize about the of import instruments of economic system like Microfinance.

So I select this subject to fix my term paper.

Certificate from Supervisor:

This is certified that Tauhidul Alam pupil of BBA plan ( concluding twelvemonth ) of Department of Finance & A ; Banking. The University of Chittagong. Bangladesh. bearing ID: 07303087 Session: 2006-07. has successfully completed the assigned term paper on “Comparative analysis between RDS of IBBL and MC Programs of BKB for poorness relief of Bangladesh” under my direct supervising.

I wish their success in every phase of life.

—————————————–
Mr. Shahadat Hossain
Assistant Professor.
Department of Finance & A ; Banking.
University of Chittagong. Bangladesh.

Executive Summary

As a portion of BBA plan. I completed my term paper plan. Most of the classs of BBA plan are practical oriented. And term paper plan is besides a critical demand to obtain the BBA grade. Consequently I tried my best to fix and show this term paper on “Role of Microfinance for Poverty relief in Bangladesh”-Comparative analysis between RDS of IBBL and BKB. Most Microfinance establishments are non-governmental organisations ( NGOs ) . Private commercial Bankss. specialised Bankss and State owned Bankss frequently supplying an array of societal services. They focus on Microfinance as a societal intercession or a poverty relief tool. They besides face a quandary between accomplishing commercial viability and functioning the hapless. Most of the Microfinance establishments do non mobilise nest eggs. They emphasize on expense of loan. They think that. hapless can cut down their poorness if they get the chance of some investing and MFIs helps in this instance by supplying micro loan. There is no uncertainty that strong demand exists for microfinance services. among the hapless.

More than 19 million of the poorest families around the universe now have entree. That is encouraging because the figure has increased well since 1997 when the Microcredit Summit Campaign ( MSC ) was launched. A batch of attempt is being put into institutional capacity edifice for MFIs that have the vision and willingness to supply micro finance services to big Numberss of hapless families. New effectual direction tools are being created and disseminated to microfinance establishments. This paper contains the follows –

* A item overview of the function of MF in the development of BD. * A analysis about two commercial Bankss ( IBBL and BKB )
* Performance of these establishments.
* The activities of two MFIs working in Bangladesh.
* Problems. Prospects and some suggestions for these MFIs.

Abbreviations

ASA: Association for Social Advancement
BRAC: Bangladesh Rural Advancement
Medium frequency: Micro Finance
MFIs: Micro finance Institutions
Nongovernmental organization: Non Governmental Organization
ROSCA: Rotating Savingss and Credit Association
USAID: US based Agency for International Development UNDP: United Nations Development Program
ADB: Asiatic Development Bank
IBBL: Islami Bank Bangladesh Limited
RDS: Rural Development Scheme
BKB: Bangladesh Krishi Bank

1. 1 Preliminary:
The micro finance revolution is a important part to the pattern of worldwide development. It is an aspiration accomplishment that will be the unequivocal work on micro finance. The micro finance revolution has been occurred around the universe for low-income people. Micro finance refers to little scale fiscal services provided to low-income clients. To most. microfinance means supplying really hapless households with really little loans ( micro recognition ) to assist them prosecute in productive activities or turn their bantam concerns. Over clip. micro finance has come to include a broader scope of services ( recognition. nest eggs. insurance. etc. ) as we have come to recognize that the hapless and really hapless and the really hapless who lack entree to traditional formal fiscal establishments require a assortment of fiscal merchandises. Micro- finance is delivered to urban and rural hapless chiefly for employment and income generating activities. Micro finance can play critical function for economic development in Bangladesh. It can better the economic status twenty-four hours by twenty-four hours. During 1988. a figure of non-governmental organisations and Grammen bank pioneered of little sum of collateral-fee. low-cost loans. popularly known as micro recognition.

These micro recognition plans have been successful in supplying applaudable entree to recognition by landless adult females and work forces. and accomplishing high refund rate of up to 98 % . Impact surveies of micro recognition plans have substantiated the of import function of recognition in the economic development procedure of Bangladesh. The recent BIDS survey on rural poorness ( 199 ) notes that the higher rate of growing in per capita income observed for micro recognition receiver when compared of that of non-recipients. An addition of self-employment. generated by the hapless with greater entree to recognition. has besides increased rural rewards due to a decrease in the rural labour supply as reported by a universe Bank survey on the impact of Grameen Bank ( 1995 )

1. 2 STATEMENT OF THE PROBLEM:
Bangladesh with its 60 % people below poorness line and 30 % life in absolute poorness is enduring from acute rural urban economic disparity coupled with illiteracy. deficiency of Proper wellness and sanitation installation. Rural Development Scheme ( RDS ) of IBBL and diversified micro recognition plans change towards the betterment of the economic and societal life manner of the rural hapless through increased production just distribution of resources and authorization. Specific mark of rural development strategy in today include the rural hapless. particularly the more deprived groups of adult females. The cardinal elements of rural development strategy are ( a ) Poverty relief and raising the populating criterion of rural hapless ( B ) just distribution of income and wealth ( degree Celsius ) to heighten the self-employment and income generating activities of the rural people. ( vitamin D ) To supply instruction and Medicare installations to the hapless ( vitamin E ) to heighten the buying power of rural people ( degree Fahrenheit ) to supply funding to develop lodging in the country. IBBL unfastened this strategy for the well being of the rural people. Because of some restriction such as deficiency of cognition of the client about the principal of Shariah banking system. recreation of financess escape of Islamic money market. over trading concern. market fluctuation. competitory market etc. the bank face the Problem to run its service.

Besides. for acquiring loan from rural development strategy. first of all a group of five members has to be performed and make full the application signifier. But most of the rural people of our state are illiterate. They are non decently cognizant about the importance of these-scheme and face job to make full the signifier. After acquiring loan they can non decently use their loan because of their illiteracy and deficiency of preparation. So. these people face the job of refund because they can non properly bring forth their income and they use their loan sum for other intent. on the other manus. 1 field officer study the 400 loanee which is really hard for one to study the huge people. Each subdivision will choose small towns ab initio within a radius of 10 kilometer of the subdivision. For the transit job. supervising of loanees that is whether the loanees use the loan sum decently or non really hard for the field officer. Besides. there is no office in the brotherhood degree. All activities are controlled from the subdivision office.

The major job of rural development strategy include ( a ) instability of rural development establishment ( B ) inefficient and corrupt leading ( degree Celsius ) maltreatment of local govt. establishments by the cardinal governments ( vitamin D ) Lack of agribusiness rural development policy ( vitamin E ) unjust distribution of benefits originating out of the rural development plan ( degree Fahrenheit ) Limited natural and logistics resources ( g ) elite laterality in rural development planning and action and ( H ) in conductive rural society. Rural Development Scheme ( RDS ) is for the rural people but all of the hapless people do non acquire the advantage of this strategy for these restrictions.

On the other manus. Sing the demands of the mark groups since late seventy`s BKB has been implementing a series of Micro-Credit plans out of which 10 plans have late been completed and 31 plans are in operation at present. These diversified micro-credit plans are being implemented by BKB to accomplish the undermentioned aims: * To make employment chances through income generating activities. * To authorise the rural adult females to set up their ain rights. * To better the populating criterion of the rural people.

* To relieve poorness of the hapless people.
* To do easy entree to institutional recognition installations and resources. * To mobilise rural nest eggs.
* To do optimal use of rural resources.
* To prosecute inactive human resources of the rural countries in productive/economic activities. * To prosecute rural people in development procedure of the state. * To extinguish development done by the money loaners.

1. 3 OBJECTIVE OF THE STUDY:
The chief aim of the survey is to measure the function of microfinance in poorness relief in Bangladesh. To carry through this chief aim following specific aims have been covered: * To understand the different signifiers of MF operation under BKB & A ; IBBL * To analyse the comparative characteristics of BKB & A ; IBBL.

* To analyse the function of MF in relieving poorness in the selected country.

1. 4 SCOPE OF THE STUDY:
This study covers all the inside informations of the “Role of microfinance for poorness relief in Bangladesh” . We get a clear thought about the microfinance done by IBBL and BKB. Researcher has done their field work by covering the IBBL of Hathazari Branch & A ; BKB of Madan hat & A ; lama Branch. And besides the borrowers are asked the assorted inquiries sing their support.

1. 5 METHODOLOGY OF THE STUDY:
The survey is both empirical and theoretical 1. Both Primary and secondary informations have been used. 1. 5. 1 Collection of Primary informations:
Data related to the study was collected by fixing a questionnaire and from the questioning the Executive Officers loanees of the Bank. Questionnaire has been prepared for roll uping informations of the socio economic conditions of 52 loanees were besides observed personally during research period.

1. 5. 2 Collection of Secondary Data:
Researcher has consulted one-year studies to fix the theoretical model of research survey. Researcher has studied the Newspaper. magazines.
Researcher has besides surf the cyberspace for roll uping necessary informations.

1. 5. 3 Analysis of Datas:
The information therefore collected have been tabulated manually. Then the informations have been analyzed by using fiscal technique such every bit ratio as per centum and statistical technique such as mean. standard Deviation. Correlation. paired sample ( T ) trial. utilizing SPSS.

1. 6 Organization of the survey:
The survey has been segmented into seven chapters. The 1st chapter includes preliminary. statement of the job. aim of the survey. range of the survey. methodological analysis of survey & A ; restriction of the survey. The 2nd chapter includes reappraisal of literature. The 3rd chapter contains debut. economic history of Bangladesh. socio-economic status of rural economic system of Bangladesh. what is Micro finance? . features of Microfinance/ Micro Credit. what is Poverty? . function of Micro finance. development of the MF in the universe history. since the beginning of clip. development of MF in Bangladesh. hereafter of MF in Bangladesh. major MFI’S in Bangladesh. The 4th chapter contains Islamic Bank Bangladesh plan of RDS. RDS of IBBL. intent of MC investing plan of RDS. features of mark group. purpose period and ceiling of investing. investing theoretical account or Mechanisms. initial loan size and involvement rate. nest eggs plan. group formation. security/ Collateral demands. monitoring and supervising system. loan repayment process. default direction. preparation installations. analysis of organisational construction of RDS. BKB. BKB office statistics. about BKB. poorness relief and micro-credit programs/ undertakings. a Outstanding characteristic of BKB.

The fifth chapter includes frequence tabular array for IBBL. t-Test for IBBL. findings and analysis of IBBL. jobs associated with RDS of IBBL. frequence tabular array for BKB. t-Test for BKB. findings and analysis of BKB. jobs associated with MF plan of BKB. comparative analysis between RDS of IBBL AND MF plans of BKB. The 6th chapter includes decision and recommendation. The last chapter contains mention and appendexes.

1. 8 Restriction of the Survey:
There are some restrictions which I faced at the clip of doing this survey are given below:

* Sufficient fiscal information for the twelvemonth 2012 was non available. in some instances merely un-audited information were collected. * It is undoubtedly apparent that Micro finance is a major role-playing sector in 3rd universe state like Bangladesh. But Bangladesh is in a backward place than those of other states. So. necessary informations are non easy available. * Lack of harmonious relation & A ; close contract between functionaries of the Organization. * It is really hard to roll up sufficient information about Micro finance establishments within a really short clip which were given to us. * Maximum information based on available in different diaries. records. books. periodicals and paperss of authorities and non-government. magazines. and day-to-day documents. * There is really few information got from the Internet web site and about that was non sufficient for our paper. * Illiteracy among the borrowers

Chapter-2

Reappraisal of Literature

Reappraisal of Literature
Microfinance is of import antipoverty tool for the underdeveloped state. From clip to clip the activities MFIs uncover what is microfinance? However. the undermentioned literature is found specifically related to microfinance and RDS strategy:

The function of cardinal bank in Micro finance in Asia & A ; the Pacific “Microfinance by and large means non merely the Provision of fiscal services. chiefly savings & A ; recognition but besides other fiscal services. to hapless & A ; low income families that so non hold entree to formal fiscal establishments. ” Schreiner ( 2003 ) . “Micro finance defined as attempts to better peoples entree to loans & A ; salvaging services-may be the fastest-growing & A ; most widely recognized anti-poverty tool. ” Alamgir. ( 2009 ) . “ADBs microfinance development scheme defines microfinance as supplying abroad scope of fiscal services such as: sedimentations. loans. payment services. money transportations & A ; insurance to hapless and low income families & A ; their micro-enterprises. ” Joana Ledger wood ( 1999 ) “Microfinance is a proviso of a wide scope of fiscal services such as nest eggs. recognition. insurance and payment services to the hapless pr low-income group who are excluded from the normal banking sectors. ”

Jahur and Quadir ( 2010 ) “Growth public presentation and impact of RDS in footings of income. household size. instruction and recognition. ” Rahman and Ahmad ( 2010 ) “Impact of RDS on rural support. socio-economic impact appraisal. ” Alamgir et Al. ( 2010 ) “Structure and outreach of microfinance services. market section. merchandises. comparative survey of RDS and conventional microfinance. impact on poorness. ” Rahman et Al. ( 2010 ) “A general overview of function if IBBL including RDS. ” Haque. and Yamaco ( 2009 ) “Impact on MF on income. ingestion. nutrition. lodging. wellness. assets and liabilities. ” Parveen ( 2009 ) “Sustainability of RDS plan in footings of loan recovery. outreach. market incursion. loan portfolio. comparative income degree and service quality. ” Saeed et Al. ( 2009 ) “Methods and manners of Islamic MF. jobs in operating and monitoring loan portfolio. ” Sundaranjan and Errico ( 2009 ) “Challenges in monitoring and control of Islamic MFIs. operational and control hazards. regulative environment. ” Rahman et Al. ( 2008 ) “RDS facts appraisal. impact on populating criterion. ” Obaidullah ( 2008 ) “Theoretical background of Islamic microfinance. ” Khan ( 2008 ) “Theoretical background of Islamic microfinance. ” Uddin ( 2008 ) “Impact of RDS plan in poorness relief in footings of socio-economic factors. ” Mohammed and Zubair ( 2008 ) “Theoretical survey of Islamic microfinance and its adaptability in Nigeria. ” Ahmed ( 2003 ) “Theoretical statement of Islamic microfinance. public presentation analysis of RDS plan through profitableness. cost construction and quality of services. ”

Ahmed ( 2002 ) “Empirical survey of Islamic microfinance in Bangladesh in footings of fiscal public presentation. economic impact and jobs of funding. three institutions-Al-Fallah. Baronial. Rescue covered. ”

Role of Micro Finance Essay Sample

Role of Micro Finance Essay Sample

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