StudentShare solutions
Triangle menu

Microfinance - how government regulations affect microfinance in Brazil - Literature review Example

Nobody downloaded yet

Extract of sample
Microfinance - how government regulations affect microfinance in Brazil

The governments of the nations have a crucial role to play from the regulatory and financing points of view. A lot of measures are required to make this form of financing a sustainable one. This requires the scope of the microfinance schemes to be further widened. There are several challenges that the governments of the countries opting for these kinds of schemes face. There is lack of mobility in the credit and a lot of reliance on the government as the source of the funds. The competitive environment of the microfinance sector is a lot biased towards the public sector organisations. Therefore the government needs to ensure all forms of transparency in the way the markets and the competitive forces work. Several works have been conducted over the years on various aspects of microfinance. A review of the literature would provide an insight into the microfinance sector and the regulatory framework within which the Brazilian microfinance companies work. Microfinance companies are considered to be feasible alternatives for banks as well as informal sources of credit. Collaterals are used to ensure the timely repayment of the funds. The specific feature of microfinance is that instead of an individual liability toward the lending institution, there is a cooperative liability towards the lender. This method guarantees that the funds are repaid on time or the payments are paid at regular intervals. If the individuals repay the loans on time, they get incentive to get loans of higher amount the next time which makes the borrowers credit worthy. The individuals opting for these kinds of schemes are forced to save for themselves so that the there is enough collateral for the amount of loan that they have taken. Due to the joint liability feature of the microcredit the risk of default is less because the people of a particular locality know each other well and they can estimate the repayment capacity and the chances of default of their co-borrowers. Along with this each of the parties in the loan can monitor each other. Therefore the basic economic problems like moral hazard or adverse selection can be removed through this feature of microfinance institutions in Brazil (Morduch, 1999, p. 1569). Though chiefly deployed by the NGOs of Brazil, the government is equally active in the developing nations in the promotion of the microfinance institutions and setting up of a stringent regulatory framework for the proper functioning of the industry. The government also has a significant role in granting credit of lump-sum amounts to the microfinance institutions. The study of various situations where the system of microcredit has been implemented has been conducted by the researchers. The results have shown that the schemes have positively affected the economies in which they were being implemented. The repayment rates had been quite high in those countries. This has been possible because of the structure of the model which entails extreme scrutiny of the borrowers of the funds. The capital that is provided as the loan is also used effectively which necessitated the repayment on time. About 15 million households represent the informal sector in the Brazilian Economy. However, the microfinance institutions have been able to bring less than three hundred thousand under its purview. This means that apart from 2.5% of the prospective market, the remaining has remained untapped. There have been several attempts on part of ...Show more

Summary

Microfinance - How government regulations affect microfinance in Brazil Contents Contents 2 Literature Review 3 References 9 Literature Review Microfinance is a form of credit in which short term loans, especially working capital loans are provided to the entrepreneurs who have a micro or small scale business…
Author : vschaden
Microfinance - how government regulations affect microfinance in Brazil essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the literature review on your topic
"Microfinance - how government regulations affect microfinance in Brazil"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Literature review 8
Abudawood ID 291335 April 2nd, 2011 SUPERVISORS: Dr. Ruba Salih / Dr. Hassan Hakimian/ Professor Naila Kabeer ABSTRACT: I am hoping that this study will represent a significant milestone on a road that has been journeyed over by scholarship on gender and development specifically in the Middle East.
32 pages (8000 words) Literature review
Marketing strategies and tools that affect hotel sales
The main key to success for any firm is the application of appropriate business strategy. To ensure high customer base along with substantial growth in business, a firm needs to devise several strategies regarding the production process, marketing, distribution etc. and efficiently implement them.
8 pages (2000 words) Literature review
The affect of globalization on China
Globalization is a significant but not a new economic phenomenon. World Bank throws out that there were three main globalization waves since 1870 where the global economy, capital flow and migration have been increasing dramatically.
7 pages (1750 words) Literature review
Impact of Microfinance on Developing Countries
Impact of Microfinance on Developing Countries Literature Review In a good number of countries, poor people continue to be excluded from formal financial institutions and other formal financial systems. This may range from partial exclusion as in most developed countries, to full exclusion in developing and poor countries (Idowu, 2008).
9 pages (2250 words) Literature review
Literature review 8
nd womens empowerment, this study will attempt to inscribe itself into broader discourses and debates concerning equity and equality, gendered inequalities, power relations, womens economic and social empowerment as they are impacted by microfinance. Saudi Arabia is an
32 pages (8000 words) Literature review
How natural things affect drug metabolism
Metabolism: It includes various processes such as reduction, hydration, oxidation, hydrolysis, etc. These processes are helpful in breaking down medications in to small and soluble chemical substances (G. GORDON GIBSON et al., 2001). Natural
3 pages (750 words) Literature review
Do Nurses' Empathy affect the outcome of care
Furthermore, literature review will also assist in building solid foundation to conduct and complete a research study through gaining better insight of the issues
14 pages (3500 words) Literature review
Do Nurses' Empathy affect the outcome of care
It is believed that empathy is essential for the profession of nursing to provide proper care (Battarbee, Suri, & Howard, 2012). Empathy is a significant aspect for nurses and they should incorporate it to provide proper
8 pages (2000 words) Literature review
How does the hidden curriculum during schooling(mainly secondary schools) affect the educational achievement of working class young people from black Caribbean and African ethnic groups in the UK
As Ball (1986) observed in the UK, the sociology of education has mainly concerned itself with analysing the relationship between social class and educational opportunities since the 1930s where social theorists advocate that
10 pages (2500 words) Literature review
HOW IT SECURITY AND ROBUST TECHNOLOGY COMPROMISES PEOPLES FREEDOM AND HOW CAN PEOPLE, GOVERNMENT AND ORGANISATIONS ADAPT TO THESE CHALLENGES
A number of other scholars have related the aspect of privacy and transformations in society. Westin conducted privacy surveys in which respondents expressed their satisfaction or
10 pages (2500 words) Literature review
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment