Impact of Microfinance awareness in Kenya - 12633 Words

MICROFINANCE AWARENESS AND IMPACT IN KENYA: A CASE OF NAIROBI COUNTY Table of Contents CHAPTER ONE INTRODUCTION 1.1 Background of the Study The need for development that saw the Kenya develop several strategies and plans such as the vision 2030 and the millennium development goals has led to development of the finance sector. The need for financing of the development projects has developed microfinance institutions in the country. Microfinance has received a lot of attention since its inception in the early 1970s perhaps, as argued by Okiocredit (2005: 30-32), due to the ability of microfinance to enable poverty alleviation and economic development through provision of credit and savings services to those earning low†¦show more content†¦They are therefore able to access subsequent loans depending on successful repayment by all group members. These payments are usually made after a specific period of time, usually one week (Ledgerwood, 1999: 137). This model of micro financing is the most commonly used by banks. It has proven to be more effective in the long run as there are few loan defaulters as each member of the group is a guarantor of the other. Berenbach and Guzman (1994: 119-139) argues that, solidarity groups have proved effective in deterring defaults as evidenced by loan repayment rates attained by organizations. Village banking model are based on village banks which are normally community-managed. The banks are established and managed by credit and savings associations established by NGOs to provide access to financial services, build community self-help groups, and help members accumulate savings (Schreiner, 2003: 118–136). This is perhaps the oldest model of micro financing, considering their formation in the mid-1980s. Usually these village banks normally consist of 25 to 50 members who majorly low-income earning individuals are seeking to improve their lives through self-employment activities. In Kenya, the need for economic development has seen the development of micro finance institutions which in normal cases start as Chamas. Chamas are small groups of individuals, who come together, collect money in a poolShow MoreRelatedResearch proposal on impacts of microfinance in Kenya3125 Words   |  13 PagesMICROFINANCE AWARENESS AND IMPACT IN KENYA: A CASE OF NAIROBI COUNTY 1 Table of Contents CHAPTER ONE ............................................................................................................................................... 3 INTRODUCTION ............................................................................................................................................. 3 1.1 Background of the Study ................................................................Read MoreEvaluating The Effectiveness Of Credit Risk Management Tools Essay1565 Words   |  7 Pagesorganization and hence the need to hedge against such risk. 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