Sunday, July 25, 2010
How Microfinance works
0 comments 10:45 PM Posted by MICROFINANCE
Microfinance is the provision of financial services to those who are excluded from conventional commerical financial services since most are too poor to offer much - or anything - in the way of collateral. It presents a series of exciting possibilities for extending markets, reducing poverty and fostering social change.
The concept of microfinance originated in the mid-1970s in Bangladesh through a pioneering experiment by Dr Muhammad Yunus, then a Professor of Economics. His aim was to offer poor people:
Thursday, April 8, 2010
Microfinance – Important Role in Economic Growth
Mobile banking Challenges and Risks
0 comments 5:47 AM Posted by MICROFINANCE
Like every new technological solution, mobile banking services face a few problems and risks too. Some common impediments identified by CGAP and Microfinance Focus are:
* Difficulty in maintaining cash float: mobile money franchise operators (agents)
often find it difficult to maintain enough cash to serve customers in rural areas who withdraw money after receiving electronic funds.
* Consumer-related issues: fraudulent activities as well as hidden charges are emerging concerns for mobile banking and you can read an informative article by CGAP about this. On the other hand, because of the simplified process of registering for mobile banking services, it is often difficult to establish the authenticity of customers.
* Regulatory hurdles: Central Banks are often wearing of allowing non-bank entities (mobile money telecom franchise operators) to receive or make payments on behalf of banks. This limits the service offering where a non-bank microfinance model is followed for mobile banking, such as Western Union’s partnership with mChek.
* Trust issues: consumers in less developed countries take time to get used to new mobile technology, especially since it involves trusting someone else with their money.
These are similar to the challenges faced by microfinance today.
Category: Payday loans