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Microfinance & Its Impact on Developing Nations

Microfinance & Its Impact on Developing Nations. By Mario Olivarez, Travis Robinson, and Terry Dike.

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Microfinance & Its Impact on Developing Nations

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  1. Microfinance & Its Impact on Developing Nations By Mario Olivarez, Travis Robinson, and Terry Dike

  2. “Microfinance offers poor people access to basic financial services such as loans, savings, money transfer services and microinsurance. People living in poverty, like everyone else, need a diverse range of financial services to run their businesses, build assets, smooth consumption, and manage risks.” -CGAP(Consultative Group to Assist the Poor) • To most, micro finance means providing very poor families with very small loans (micro credit) to help them engage in productive activities or grow their tiny businesses. - Financial Gateway What is Microfinance?

  3. The modern micro finance movement dates back to the 1970s when experimental programs in Bangladesh, Brazil, and a few other countries began to extend tiny loans to groups of poor women to invest in micro enterprises • By lending to groups of women where every member of the group guaranteed the repayment of all members, these micro credit programs challenged the prevailing conventional wisdom and proved that poor people without collateral could be "credit worthy". When offered the opportunity, they would repay loans with interest, at extraordinary rates of repayment. How did it start?

  4. Allows the poor to gain access to money to help start a business • Lends loans to those who normally would not be able to receive one via conventional methods • Beneficial to the borrower because loans are generally at a higher interest rate due to the risk involved How is Microfinance Beneficial?

  5. Microfinance Bank • Beyond our expertise • Partnership with GENTS • Started an independent study – Dr. Cohn cross listed with ECON 485 The Original Plan

  6. A class offered in the fall and cross listed with ECON 485, FINC 445 • The class will be taught via the internet from UC-Berkeley, Professor Sean Foote • Classes will most likely be taught in the Library Annex 417 D • The format is similar to that of AFIL • Speakers and readings each week The New Plan

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