Question

The following is just a suggestion of what your presentation outline should at least have: I. Introduction. Description of the Country – map of location; brief history of the country; flag and currency of the country; principal languages spoken. II. Selected Demographic, Health and income-inequality indicators; Human Development Index – These topics are covered in Section 2 of the course. You should read up what these indicators mean. This is where you learn something new. Be sure to visit www.cia.gov; www.who.int; www.unicef.org; www.undp.org; www.fao.org. If you choose a country in the Caribbean, you should also check out the website of www.paho.org. III. Non-Profit Organization and Micro-credit Financing. Look up or describe a nonprofit organization (NPO) doing microcredit financing work in that country – get info on History of the organization and micro-credit activities, how their system works, how it benefit the borrowers, how many borrowers benefit from the program, what kind of enterprises (give examples) were developed as a result of the micro-credit financing. IV. Major National Issues, epidemics, public health concerns or Humanitarian Crisis the Country is facing - Describe briefly. This section can be presented in the beginning, before micro-credit financing and right after the Health, income inequality, and Human Development section of your report. It does not have to come at the end. But sometimes, it may fit better at the end. Again, this thinking process is your group’s decision. V. Challenges and Prospects – What are some of the problems encountered in this type of loan program and how would you improve the situation. This is where you show your ability to analyze, and creativity in making changes or improvements to other people’s lives.  

I only need the answer for partV about challenges and prospects and showing some of health indicator about 250 words thank you

Answer 1

Part V-challenges and prospects.

Problems in encountered by micro credit financing are:

-over indebtedness: it deals with the marginalized sections of Indian society, intending to improve their standard of living. Thus over indebtedness is a severe challenge to its growth. It gives loan without collateral, which could increase the risk of bad debts. Fast paced growth requires proper infrastructure planning, which the Indian microfinance sector evidently lacks. Also lack of Apex control over microfinance institutions in India , leads to cause of over indebtedness.

-high interest rate in comparison to mainstream banks: most of the microfinance institutions charge a very high rate of interest when compared to other banks. Even though the regulatory authority RBI issued guidelines to remove upper limit of 26% interest on loans, most MFI sector players benefited from the RBI guidelines update and the borrowers were left for the worse.

-widespread independence on Indian banking system: most of the microfinance institutions function as register non governmental organisation, they are dependent on commercial banks for stabilized wanting to carry out their own lending activities.Most of the banks are private institutions charging higher rate of interest. So this makes them incompetent as a lending partner.

-inadequate investment validation: because of lack of reliable and consistent validation procedures, MFI teams are unable to achieve the level of quality information that they need to make investment decisions.

-lack of enough awareness of financial services in the economy: lack of awareness about policies and products offered by MFI, make it difficult for the institutions to sustain in competitive environments.

-regulatory issues: there is a need of separate regulatory authority for microfinance industry.

-choice of appropriate model: choice of model increases the risk of borrowing for the weaker section and is irreversible. At the end decision of model affect sustainability of MFI.

Solutions to improve the situation:

-microfinance institutions should be well equipped and trained with project management capabilities so as to impart knowledge to the borrowers.

-Micro loans should not be offered for any purpose, it should be issued for the purpose of carrying out self reliance projects or enhancing already existing capabilities.

-loans should not be offered for those people who are very poor, as it will end up in using the acquired micro loans for their immediate needs.

-the purpose of the loan should be properly assessed by trained project management personnel, in order to predict its sustainability.

-interest rate should be constant and at a low rate with no hidden cost attached in order to help the borrower out of poverty.

-government should take up some rehabilitation schemes for the destitute in the community as microfinance loans is not suitable for them.

-government should enforce strict legislative measures to regulate the activities of microfinance.

-microfinance institutions should work as a team to avoid double crossing-( double crossing means more than one micro loan is given to an individual or household by different MFIs).