Micromanage is defined as the practice of providing financial services – such as loans , savings and insurance – to very poor families, to help them grow tiny businesses or engage in other productive economic activities. This process enables the working poor to become more self-sufficient and in turn, improve the lives of family members, communities and whole societies. Micromanage used to be known only as “microcircuit,” or Just the part of financial services that refers to loans.
Microcircuit came to prominence in the sass, though early experiments date back 30 years ago in Brazil, Bangladesh and a few other countries. This innovation empowered the poor in a new way by providing them with access to financial services that were formal and secure. Microcircuit is loaned to a microdensitometer by a bank or other institution and can be offered, often without collateral, too group or an individual. mechanism that allows a number of individuals to gain access to microcircuit by providing collateral or guaranteeing a loan through a group repayment pledge.
The incentive to repay is based upon peer pressure; if one person in the group defaults, the other group members make up the payment amount. Individual lending focuses on providing microcircuit to one client and does not require other people to provide collateral or guarantee a loan. One type of microcircuit is a working capital loan which is most often used by a client to purchase additional inventory for their business, such as bags of grain for a grain seller or soft drinks for a beverage vendor.
Over time, the micromanage industry recognized that the poor who lack access to rotational formal financial services required a variety of financial products to meet their needs, not Just microcircuit. So microcircuit evolved into micromanage. A variety of institutions can provide these services, including Nags, credit unions, cooperatives, private commercial banks, non-bank financial institutions (some that have transformed from Nags into regulated institutions) and parts of state-owned banks.
the poor to earn on their own by creating an employment for them. This objective can be defined as: Providing employment opportunity to the poorest of the poor. Cultivating the habit of savings from the little earning. Providing credit at the affordable rate of interest Disbursing the credit amount at short notice. Eliminating the informal moneylenders from the credit link. Encouraging the rural folks, especially women entrepreneurs. Ultimately providing better social status to the rural households.
INBOARD is set up as an apex Development Bank with a mandate for facilitating credit and village industries, handicrafts and other rural crafts. It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas. In India, INBOARD was the first organization to notice the phenomenon of micromanage. Ever since that time the spread of micromanage is steadily growing through the She. However in 1996, INBOARD launched a nationwide pilot projects to link the She to the banks.
Grahame Bank has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. Grahame Bank provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At B, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the over all development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable.
Professor Muhammad Yuan’s, the founder of “Grahame Bank” and its Managing Director, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, “these millions of small people with their millions of small pursuits can add up to create the biggest development wonder. ” As of July, 2009, it has 7. 93 million borrowers, 97 percent of whom are women. With 2,558 branches, GOB provides services in 84,573 villages, covering more than 100 percent of the total villages in Bangladesh.
A self-help group is a village-based financial intermediary usually composed of between 10-15 local women. Most self-help groups are located in India, though She can also be found in other countries, especially in South Asia and Southeast Asia. Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the embers or to others in the village for any purpose. In India, many She are ‘linked’ to banks for the delivery of micro credit.
SSH is a small group of rural poor, who have voluntarily come forward to form a group for improvement of the social and economic status of the members. It can be formal (registered) or informal. It underlines the principle of Thrift, Credit and Self Help. Members of agree to save regularly and contribute to a common fund. The members agree to use this common fund and such other funds (like grants and loans from banks), which they may receive as a group, to give small loans to deed members as per the decision of the group.
The rural poor are incapacitated due to various reasons, such as; most of them are socially backward, illiterate, with low motivation and poor economic base. Individually, a poor is not only weak in socio-economic term but also lacks access to the knowledge and information, which are the most important components of today’s development process. However, in a group, they are empowered to overcome many of these weaknesses. Hence, there are needs for Eggs, which in specific terms are as under:- To immobile the resources of the individual members for their collective economic development.
To uplift the living conditions of the poor. To create a habit of savings. To immobile individual skills for group’s interest. To create awareness about rights. To assist the members financially at the time of need. Entrepreneurship development. To identify problems, analyzing and finding solutions in the group. To act as a media for socio-economic development of the village. To develop linkages with institutions of Nags. To organize training for skill development. To help in recovery of loans. Teamwork. To develop leadership qualities. To use as an effective delivery channel for rural credit.
