Lesson 1 Flashcards
Microfinance is a _____ provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services
banking service
allows people to take on reasonable small business loans safely, and in a manner that is consistent with ethical lending practices.
Microfinance
a financial operation that provides small loans to struggling businesspeople in order to expand their small enterprises.
Microfinance
Microfinance utilizes ______, usually administered by small scale money lenders
informal money lending technologies
Microfinance utilizes ______, usually administered by small scale money lenders
informal money lending technologies
instituted to give loans that will be quick, convenient, and flexible, required to accommodate their clientele
Microfinance
Microfinance originally started with _____, which is the practice of providing extremely small loans to those who do not have a steady source of income, collateral, or any credit history
microcredit
Microfinance aims to support and kickstart _____ who do not have the financial backing to begin a small business or capitalize on an idea.
entrepreneurs
Micro-Financing Institutions (MFIs) is initially created for _____ application but are slowly making their way into the developed world
Third World
an emerging industry throughout the world
Micro-Financing Institutions (MFIs)
Micro-Financing Institutions (MFIs) mission is to alleviate poverty by targeting the poorest sector of the population, the_____, and ____ especially
bottom 20 percent, women
designed to motivate target clients and inspire the development of their product
Micro-Financing Institutions (MFIs)
profit is not the goal for this type of organization (MFIs); ______ is
sustainability
______will enable a MFI to expand its operation at a sustainable rate and also reach all those who are in need
Self-financing
Microfinance includes a number of services, such as _____, _____, ______, ____,_____ and ____. (SCFMM)
savings accounts
checking accounts
fund transfers
microinsurance
microcredit.
its goal is to provide financial services to help encourage entrepreneurs in impoverished nations to act on their ideas and obtain the financial tools available to do so and to eventually become self-sustainable
Microfinance
a few more of microfinance’s overarching goals include (3) (PDB)
a. to promote economic development,
b. decrease unemployment, and
c. boost small businesses.
some microfinance institutions provide _____and _____ in order to best position their clients for starting up a small business or to act efficiently as an entrepreneur.
financial and business education
Banking for individual entrepreneurs and small businesses revolved around _____
relationship-based banking.
______, where multiple individuals come together to form a group to collectively apply for a loan.
Services for a group
TRUE or FALSE
When applying for microcredit, individuals may not get a large loan thus, they may decide to come together and form a group to qualify for a larger loan.
TRUE
Upon the creation of microcredit by Bangladeshi social entrepreneur ____ in 1983, microfinance was simultaneously created
Muhammad Yunus
In ____, Yunus established _____ in Bangladesh.
1983, Grameen Bank
The goal of Grameen Bank was to initially provide _____
small loans to entrepreneurs.
What inspired Yunus to have a vision for microcredit?
when he witnessed women who made bamboo stools in Bangladesh making two cents a day
He decided that if the women were able to fall back on a loan, they would be able to improve their margins and gain a more substantial profit. After issuing them a loan of $27, following the ____, the women were able to repay the loan and keep their business running.
group model
states that the borrower must set aside a portion of profits in a savings account with the financial institution to be held as collateral until the loan is paid
loan covenant
it provides some protection for creditors, and if the loan is repaid, the borrower would’ve earned savings interest on the money that was deposited in the savings account
loan covenant
In 2006, Yunus received the ____ for his efforts with Grameen Bank.
Nobel Peace Prize
The bank currently oversees _____operational locations and employs about ____ individuals. Furthermore, there are currently ____ microfinance institutions.
2,500
22,000
10,000
PROS OR CONS
it provides financial opportunities for those in impoverished nations or those with lower socioeconomic backgrounds
PROS
PROS OR CONS
it encourages people to be financially independent and provides them financial resiliency to be able to cover any large unforeseen expenses
PROS
PROS OR CONS
it helps to provide financial services to those in remote locations where traditional financial institutions do not have operations
PROS
PROS OR CONS
it also provides education
PROS
PROS OR CONS
it can encourage entrepreneurial activity and business development in poverty-stricken areas.
PROS
PROS OR CONS
it can take advantage of those in tough economic situations, a situation similar to loan sharks. Some microfinance loans may include interest that can be as high as 30% or even higher
CONS
PROS OR CONS
according to several studies, recipients of microfinance loans did not realize an improvement in their annual net income.
CONS
A Micro, Small, and Medium Enterprise in the Philippines is defined as any business activity or enterprise engaged in industry, agri-business and/or services that has ____and ____
(1) an asset size (less land) of up to PhP100 million
(2) an employment size with less than 200 employees.
is known globally as the “grassroots” of microfinance models
Grameen Bank model
Grameen Bank originated in _____ by Professor Mohammed Yunus during the early 1970s
Bangladesh
It has provided more than $2.1 billion in loans to approximately ____ people, ____ percent have been women.
2 million
94 percent
Grameen Bank, Bangladeshi bank founded by economist Muhammad Yunus as a means of providing ____ to poor individuals
small loans
During the training, they learn about the Grameen Method and formally organize a group of ____. _____members are then issued small loans. These groups must meet once a ____ to repay the loans. With each loan successfully repaid, this increases the number of ____who may borrow and the amount of each loan.
five
two
week
members
Give the 3P’s
profit
people
planet
What does CSR means?
Corporate Social Responsibility
Happens when something is given to people without demanding a payment
Dole Out
What does MSME means?
micro small medium enterprises
What does TBL means?
triple bottomline
