Microfinance has received a lot of attention recently

Microfinance has received a lot of attention recently, both from policy makers as well as in academic circles. Two of the main topics that have been hotly debated are explaining joint liability group lending and its implications for reducing information asymmetries, and the trade-off between the financial sustainability and outreach of microfinance programmes. This Feature contains three novel empirical contributions providing new insights with respect to why and how joint liability group lending works. It also contains the first large-scale systematic analysis of the trade-off between financial performance and outreach of microfinance institutions.

Lack of access to credit is generally seen as one of the main reasons why many people in developing economies remain poor. Usually, the poor have no access to loans from the banking system, because they cannot put up acceptable collateral and/or because the costs for banks of screening and monitoring the activities of the poor, and of enforcing their contracts, are too high to make lending to this group profitable.
Since the late 1970s, however, for a long time it seemed that microfinance could accomplish social and financial goals simultaneously and without frictions. The number of people gaining access to financial services climbed steadily, while microfinance became increasingly commercialized and transformed into a more and more financially efficient industry.Excessive profit-orientation in some parts of the market did not only affect social objectives, it also raised moral hazard among staff of microfinance institutions and their clients. Problems emerged as some MFIs expanded too quickly, rolled out new products or expanded into different markets without the required institutional capabilities and controls. In order to enter a sustainable growth path, microfinance has to achieve a new balance between social and commercial objectives. To this end, client focus needs to be put back at the core of all operations. This does not mean to return to the origins of microfinance, but rather to find a new “socio-commercial” approach to serving the poor. Three microfinance financial services namely, microcredit, micro-savings and micro-insurance have been identified through literature among other non -financial services. In this study, researcher has studied only the influence of financial services of microfinance on entrepreneurial success of women entrepreneurs. An empirical investigation is carried out among a sample of 464 women receiving microfinance services, selected using stratified random sampling technique. The data were collected using a structured questionnaire through face to face interviews. The statistical package for social sciences is employed to test the relationships between these microfinance services and entrepreneurial success. The sample of this study captures only the women entrepreneurs from Non-Bank Financial Institutions registered with the Central Bank of Sri Lanka. The results have discovered that microcredit and micro-savings have a positive relationship with entrepreneurial success of women, while micro-insurance has not shown such a relationship. These findings can be helpful to the policy makers in developing the microfinance sector and microfinance institutions to design their service offers.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2007.02013.x/fullhttp://www.microfinancegateway.org/sites/default/files/mfg-en-paper-microfinance-in-evolution-an-industry-between-crisis-and-advancement-sep-2012.pdf

x

Hi!
I'm Delia!

Would you like to get a custom essay? How about receiving a customized one?

Check it out