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ECON 465 March 5, 2009 Catherine Nguyen Samuel Oh.

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Presentation on theme: "ECON 465 March 5, 2009 Catherine Nguyen Samuel Oh."— Presentation transcript:

1 ECON 465 March 5, 2009 Catherine Nguyen Samuel Oh

2  What is microfinance?  Origins  Institutions  Jobs  Benefits  Examples  Current Conditions  Future Prospects  Concerns

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4  Microfinance is defined as financial services for poor and low-income clients.  Microfinance is a movement that will help low income families have access to financial institutions.

5  Microfinance clients are poor and have low- incomes.  Microfinance clients tend to be below the poverty line.  Many households are without financial access.

6  Most microfinance intuitions started as not-for-profit organizations.

7  ACCION Communitaria del Peru (ACP)  ACODEP, Nicaragua  ACTUAR/Tolima, Colombia  ADMIC National, A.C., Mexico  Agencia de Desarollo Economico Local de Morazan, El Salvador  Asociacion Benefica PRISMA, Peru  Asociacion de Mujeres Campesinas Salvadorenas, El Salvador

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9  Microfinance can provide a range of benefits that poor households highly value.  Microcredit improves lives.  Other microfinance services include…

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11  Report from Economist Intelligence Unit, Oct  Overall portfolio value increase since 2001: from $1.19 bn to $9.25 bn.  34% growth/year.

12  Bright in current financial markets.  Typical repayment rates are 95-98%.  Not a solution to poverty.

13  CompartamosBanco listed its shares for $1+ bn in  Legal Loan Shark?  Average interest rates 79%+.  Exploiting the financial ignorance of customers?

14  Allowing open market to meet needs.  Microfinancing is labor-intensive.  Entice competitors and lower interest rates (115% seven years ago).  Financial Literacy courses to clients.

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