Proposal Of A Global Microfinance Financial Authority Mechanism

3610 words - 15 pages

PROPOSAL OF A GLOBAL MICROFINANCE FINANCIAL AUTHORITY MECHANISM

CZECH AGRICULTURAL UNIVERSITY
INSTITUTE OF TROPICS AND SUBTROPICS
AGRICULTURAL SPECIALIZATION
SUSTAINABLE RURAL DEVELOPMENT IN TROPICS AND SUBTROPICS

List of abbreviations

FX Foreign Exchange
GMFA Global Microfinance Financing Authority
MFI Microfinance Institution
MII Microfinance Investment Intermediary
MIV Microfinance Investment Vehicle

Keywords:
microfinance, funding, inefficiency, coordination, FX risk, guarantee, credit bureau

Abstract
It is expected that microfinance services at present affect more than 533 millions of people, including the families of the clients.[1] A ...view middle of the document...

The total estimated investment by different funders is annually $13 billion USD (IAMFI), out of the total microfinance loans outstanding portfolio of over $44 billion USD.[2] This means that almost a third, 29% of the total of microfinance funding is channeled through international financing and continues to grow fast. The assets under management of MIVs rocketed from USD 1,1 billion in 2004 to 6,02 billion USD in 2008.[3] There is a number of limitations in local capital markets. Capital is usually expensive and loans are conditioned by short notice cancellations, increasing risks for MFIs which must build their portfolio on stable and durable funding foundations. Therefore MFIs have to look abroad for capital, balancing the mix of available financing sources. Too little and too few external funding sources can delay growth and inhibit poor clientele’s access to financial services, especially where local funding markets are underdeveloped or where young institutions cannot reach permission of the financial authority to accept deposits. Besides, international funding confers prestige and reduces susceptibility to local political risk. However, this type of funding is tied to severe problems difficult to surmount, such as FX risk, which transforms every unhedged loan into a potential threat for the debtor. Also, heavy investment concentration of the sector is a bareer for growth of small sized institutions. At last, lack of information sharing between the funders means the sector is not measured nor monitored and MFIs can and frequently do deceit funding sources. Given these facts, their reigns a striking absence of a globally acting authority, that would service individual financing initiatives in order to overcome the mentioned barreers, reap advantages of coordinated effort, increasing efficiency of the worldwide funding. As a result, the international market without a single coordinator is fragmented, inefficient and burdened with high transaction costs. This paper proposes creation of a Global Microfinance Financing Authority (GMFA) , formed by representatives of the sector, multilateral institutions and national states, in order to focus on synergy of three spheres of international financing, where aforementioned inefficiencies take place: foreign exchange risk coverage, foreign funding securities and information sharing between funders. These deficient and inefficient areas would be complemented with the following innovations: global foreign exchange risk fund, global guarantee fund and central registry of institutional debtors. The funds subjected to GMFA coordination do not require their own capital, instead they coordinate private resources currently available. Such multitasked endeavour could reap synergies due to its concentration of knowledge, strategic acting on planetary level, elimination of duplicities, lowering the transaction costs, leading to reduction of the cost of capital for the poor.

...

Other assignments on Proposal Of A Global Microfinance Financial Authority Mechanism

The Global Financial Crisis: Assessing Vulnerability For Women And Children, Identifying Policy Responses

1801 words - 8 pages The Global Financial Crisis: Assessing Vulnerability for Women and Children, Identifying Policy Responses Mayra Buvinic World Bank February 2009 The current global financial crisis, on top of recent food price increases (which, while down from their peak last year continue to affect the poor in developing countries), will have serious gender specific consequences for women in poor countries and their children. While women (and men

Reform Of Public Sector In Solomon Islands - Siwa & Siea

7276 words - 30 pages sustainable energy development. (Sustainable Energy Regulation Network, 2012) Since 2009 with new installation of prepaid meters, revenue collection has started to improve and billing and metering cost have been reduced. However, SIEA’s financial position is still risky and significant trade receivables from other government entities, notably the Solomon Islands Water Authority (SIWA), remain unpaid. A major assistance from SIG was through CSO

Red In Uttrakhand

1001 words - 5 pages the Agency/individual • Address • Past experience if any (Specific details on types of projects undertaken, support received from NABARD or any other Institution/ Body/ authority.) • Financial stake in the proposal; to what extent? Item wise financial details, contribution of the proposer, other partners/ stakeholders, their role and contribution, if any • Whether the Proposer’s role is limited to

Grameen Bank

4194 words - 17 pages a majority of people living near or in poverty lack or cannot access even the fundamental banking services. Moreover, about 2.5 billion of the adult population do not own a bank account at any financial institution according to the World Bank’s Global Financial Inclusion Database. In addition, WBGFID indicates that only 41% of the adult populace in developing economies own an account, and this number drops to over 20% of adults in extreme

Testbank

2621 words - 11 pages positive events only. d. All of these 17. The adoption of International Financial Reporting Standards is an example of a. The impact of technology on user's needs. b. The impact of globalization on capital markets c. Ethical behaviour. d. None of the above 18. Which of the following statements does not describe the activities and authority of the Ontario Securities Commission (OSC)? a

Assignment/ Research Writing

9344 words - 38 pages satisfaction is a function of financial services. In fact, customers are more satisfied by savings products than credit products. Thus, for all kinds of savings, the average satisfaction scores are above 3 .56 (71 .2 %), the global satisfaction rate for all services (3.9 ˃ 3.56). Results also prove that clients are more satisfied by the cash deposit saving (F= 6.27, p=.000) than other kind of savings (4.06 ˃ to 3.76, 3.87 and 3.91 for term deposit

Shroders

778 words - 4 pages  programme will provide you comprehensive training and support together with the practical and theoretical experience to prepare you for an agile and global career within investment. As part of your training you will gain experience in some of the following areas: Equities Equities is Schroders’ largest asset class and we manage over £134.4bn* in equity assets. As part of a rotation within Equities you will be required to assist Fund Managers

Financial Regulatory Reform

1721 words - 7 pages cooperation between them. Also, a new authority for the Federal Reserve will be given to supervise all firms that could pose a threat to financial stability or jeopardize the stability of the financial system. New standards and stronger capital will be required for all financial firms. Understandably, higher standards will be required for large and interconnected firms because more depends on them and very much damage will occur if only one of

Mgmt591 Courseproposal

650 words - 3 pages Course Project Proposal DeVry University – Keller Graduate School of Management MGMT591 – Leadership and Organizational Behavior   Overview of Organization The organization that will be the topic of discussion for my final project paper is Bank of America Corporation. Bank of America Corporate is a multinational banking and financial services corporation headquartered in Charlotte, North Carolina. Bank of America consist of eight Lines of

Intelligence

3412 words - 14 pages and mediate their differences (Kefela, 2011). The referred institutions are the bodies setting formal rules (property rights, rule of law etc) while taking into account informal constraints (beliefs, traditions and social norms) that shape human interactions (United Nation, 2008). A country’s good governance is therefore the mechanism in which government exercise the power of authority to manage a country’s resources and affairs though proper

An Analysis Of The Choice Between Separated And Mixed Operation Model For Icbc( London)

9211 words - 37 pages Finance, Vol. 18, pp. 1155-1176. Joppe, M., (2000), The Research Process. Retrieved February 25, 1998, from http://www.ryerson.ca/mjoppe/rp.htm Kirk, J. and Miller, M., (1986), Reliability and validity in qualitative research. London: Sage Publications. Ojo, M., (2005), “The Financial Services Authority: A Model of Improved Accountability?”, Global Journal of Business Research, Vol. 1, pp.20-25. Polski, M. M., (2001), “Measuring Transaction

Similar Documents

Assess How The Source Of Finance Impacts A Businesses Ability To Achieve Its Financial Objectives

1247 words - 5 pages Assess how the source of finance impacts a businesses ability to achieve its financial objectives (20 marks) There are five financial objectives, which are influenced by internal and external sources of finance. These five financial objectives are: liquidity, solvency, efficiency, profitability and growth. Internal sources of finance come from within the business and include retained profits. External sources of finance can be classified into

Early Life And Education Essay

4963 words - 20 pages people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Muhammad Yunus was the first Bangladeshi to ever get a Nobel Prize. After receiving the news of the important award, Yunus announced that he would use part of his share of the $1.4

National Remittance Conference Essay

5411 words - 22 pages . She stressed that there should be a proper complaint mechanism on any wrong doing in remittance sector and everyone should be made aware about the complaint mechanism. Recommendations At the last part of her speech Ms. Ozaki gave following recommendations:  Access to Finance – Everyone should have access to finance and for this reason banks have to go to each and every part of country so that the cost to reach to a financial institution

A Microfinance Mis Essay

263 words - 2 pages A Microfinance MIS XBIS/219 06/15/2012 Clara Spenny A Microfinance MIS The Business Intelligence and Reporting Tools (BIRT) is an Eclipse-based open source reporting system for web applications, especially those based on Java and Java EE (eclipse.org). The report designer and a runtime component are BIRT two major components. When these two components are combined it will allow the user to create graphically rich reports. BIRT also