Relationship Between Microfinance And Nigerias Economic Growth Economics Essay

Relationship Between Microfinance And Nigerias Economic Growth Economics Essay ABSTRACT Microfinance has over the years been associated with eradicating poverty, and consequently improving the standard of living of the less privileged members of a society, and rubbing on positively on the nations economy. This dissertation aims at exploring the impact microfinance has on economic growth, considering a specific case of the Federal Republic of Nigeria. Due to the fact that this area of study has not witnessed so much research in the past, this work seeks to come up with an approach where the different links between microfinance and economic growth can be discovered and studied. Since most societies, especially the developing ones usually experience the presence of two types of financial system, the formal and the informal one under which microfinance falls, this will also be taken into consideration. The first hypothesis to be considered has to do with the micro level and this examines the relationship between microfinance and the financial system. The Second hypothesis h as to do with the macro level and examines the relationship between the financial system and economic growth, while the third one links the previous two, by checking the relationship between microfinance and economic development. Keywords: Microfinance; Economic Growth; Financial System; Nigeria INTRODUCTION Microfinance Institutions are financial organisations licensed to provide micro-savings, micro-credit, and micro-insurance in an economy. They operate in the informal sector of the financial system and are the major source of fund-provider for the medium, small and micro-enterprises. The basics of microfinance is the fact that the poor cannot access a loan from a bank of any reasonable commercial source, that is why Microfinance Institutions go out to the villages, meet with the poor who are encouraged to form an association, they give them micro-credits and sometimes even give them trainings to help them make the best use of the loan accessed (Mohammed and Hasan, 2008). The methodology used by most micro-finance institutions to make loan is that they gather people into trust groups and meet weekly. These groups assume joint liability and joint guarantee on loans extended to any member of the trust unit and this invariably helps in reducing incidence of defaults and bad loans. Most Micro-Finance Institutions enjoy a high repayment rate. It should also be noted that majority of microfinance customers are women who also make up a greater percentage of the worlds poor, and also experience a very high rate of unemployment; and sadly in most cases are responsible for providing for and taking care of their families. Nigeria with a GDP-real growth rate of 5 %( 2009 est.), remains a major player in the African economy but her population of about 149, 299,090(sourced from CIA-The world fact book), which is the largest in Africa, has about half of it living in poverty. However, since the introduction of microfinance in the country, an increase has been noticed both in the growth of the economy and also in the increase in number of microfinance institutions. The Central Bank of Nigeria is saddled with the responsibility of issuing banking license and supervision of banks in the country, Micro-finance Institutions inclusive. LITERATURE REVIEW Microfinance, through its provision of financial services to the poor can influence economic growth by encouraging savings, giving out loans for feasible investments, provision of free advisory services to new clients on how best to invest, and also to those with long standing relationship, on how to increase the marginal productivity of capital (Pagano, 1993). A lot of studies have been carried out on the relationship between financial development and economic growth. King and Levine(1993) are in support of the view that financial development leads to economic growth and in their visit on Joseph Schumpeters work pointed out that banking institution through their provision of funds for productive investments are of great importance to economic growth(Schumpeter, 1911 cited in King and Levine, 1993). Greenwood and Jovanovic(1990) suggested that the relationship between financial development and economic growth is mutual, while Khan,(1999) who is of a similar opinion explains further that economic growth create financial development which in turns helps in sustaining the growth. Qayyum et al.,(2007?) are of the opinion that direct finance has a significant positive relationship with economic growth. The availability of funds to the poor increases production and output, this also leads to an increases in the demand for more financial services (micro-savings and micro-insurance), which positively affects financial development and sets the economy on the path of growth(Khan, 2008).It can then be said that availability of funds generates enterprise, enterprise generates finance flow, finance flow generates financial development, while financial development generates economic growth. De Gregorio and Guidotti(1995) also argued that financial development leads to improved economic growth, especially when funds are efficiently invested. However, Kemal, et al.,(2004) do not regard finance(micro-finance inclusive) as an important determinant of economic growth and Lucas(1988) even referred to it as overstressed, while Levine(1997) sees financial institutions as more harmful to a nations economic growth. This led to a call for redefinition and the use of appropriate measure of estimation of the relationship between financial development and economic growth and development of financial intermediaries by Bencivenga and Smith(1991). The main objective of Microfinance is to raise income, by encouraging private sector activity through the provision of micro-credit to micro and small scale entrepreneurs ((Aghion and Morduch, 2000)). In a study conducted by Chua et al.,(2000), they noticed that the impact of microfinance services on income and consumption is dependent on the initial endowment of the household and the length of time they have been clients of the institution. It is also affected by how efficient they are in the management of the sourced resource and also the profitability of the sector they invest in. Availability of Social amenities and a cheaper source of factors of production also influence income. According to Akanji (2002), the poor make effective use of the credit facilities and not only are they willing to pay the high interest rate on loan, they also in no time make enough returns to run a savings account with the MFI. It should also be noted that the conversion of the poor who were formerly economic liabilities into profit making micro-entrepreneurs have a positive impact on the financial system and consequently begins the process of economic growth by bring its full physical and human resources into productive use (Kamath, 2008). METHODOLOGY Not many literature are available as regard the relationship between microfinance and economic growth, therefore the study will rely much on theoretical framework in order to understand the link between microfinance and economic growth. Both Primary and Secondary sources of data will be used and Questionnaires will be sent out to have a direct feedback from the beneficiary of the scheme while previous studies and findings as regards the Nigerian economy will also be put into use in order to determine a theoretical association between Microfinance and Economic Growth. It should be noted that the two main variables in this dissertation is Microfinance and Economic growth. The choice of Nigeria as a case study was borne out of the fact that the country has recently had its microfinance regulations tuned to enable it play its role in serving its targeted market effectively. An increase in the growth of microfinance institutions in the country has also made them better established and competitive, giving the erstwhile neglected micro-entrepreneurs a choice. The relationship between financial system and economic growth will be first examined and in the second part, microfinance, alongside its associated theories will be explored to determine their impact on Economic Growth. The third part will be about examining the impact of theoretical macro-level effect on the case study, which is Nigeria. Its effect on the case study will help in reshaping the theoretical framework which will be the basis for conclusion. To determine the impact of Microfinance on economic growth, micro credit disbursement from 2000 to 2009 will be analyzed using both non-parametric and parametric test methods. The parametric test involves regressing the dependent variable (GDP from 2000-2009) against the explanatory variable (micro-credit disbursements) to ascertain if its significant and provide explanatory power for economic growth. While the Chi-square method of non-parametric test will be used to examine the questionnaire to determine if there is any association between Microfinance and economic growth. RESEARCH QUESTIONS AND OBJECTIVES This Objective of this dissertation to answer the following questions: Is there a relationship between microfinance and Nigerias economic growth between 2000-2009? Does investment of micro-credit into commerce contribute more to economic growth than other sectors? Does microfinance have an effect on the financial system? Does an increase in the number of Microfinance Institutions result to an increase in economic growth? POTENTIAL PROBLEM The potential problems envisaged in this research work is the availability of data from microfinance institutions in Nigeria as a large number of them do not have access to the internet and so do not post their information online. This brings about another problem, which is the distance between my place of study and the location of the case study. The relative scarcity of research on this area of study also creates a problem of limited materials. However, I have devised solutions for each of the problem. Most of my materials will be sourced from the Microfinance Unit of the Other-Financial -Institutions department of the Central Bank of Nigeria, as they have unhindered access to records of every Microfinance Institution operating in Nigeria. Most of my materials will be sent online while I will make use of a cheap and reliable courier service for my questionnaires. Also, the available materials online will be coupled with those sourced from the Central Bank of Nigeria Library and Dat a collected on the MFIs. RESOURCES REQUIRED The main resources needed are data on Nigerias GDP, list of MFIs presently operating, records of loan disbursement by MFIs, records of total amount set aside for Small and Medium Scale Enterprise by the nations commercial banks. All of these will be sourced from the Central Bank of Nigeria, while Past Studies and other literature will be freely assessed through the school library. The Questionnaires will be sent through mail and returned through courier. Estimated cost at conclusion is  £250, which includes cost of printing and binding, as well as courier cost. WORKPLAN ITEM PARTICULARS NOTES TIME FRAME 1. Dissertation Proposal Submission May 5, 2010 2. Literature review Sourcing of materials and review of literature July 4- 16, 2010 3. Submission of preliminary literature review to my supervisor, and making suggested corrections June 17- 20, 2010 4. Methodology Reading on Methodology and structuring of theoretical framework June 20- 24, 2010 5. Submission of proposed methodology to supervisor, and making suggested amendments. July 25-June 28, 2010 6. Questionnaire Devise Questionnaire June 29-30, 2010 7. Submission of questionnaire to supervisor, and making suggested amendments July 1-5 2010 8. Questionnaire distribution July 6, 2010 9. Collection of all other needed data and further review of past literature July 7-20 2010 10 Collection of questionnaires and analysis of findings July 21- 25, 2010 11. Data Analysis July 26- 30, 2010 12. Interpretation of Findings. August 1-5, 2010 13. Formulation of Conclusion August 6-10,2010 14. Abstract, and appendix and referenced materials arrangement August 11- 15 15. Updating and Review Review with Supervisor August 16-20, 2010 16. Self review and amendment August 21-25, 2010 17. Final review with supervisor and proof-reading August 26-28,2010 18. Printing and Binding Printing and Binding August 29, 2010 19. Submission Submission at the PG office September 2, 2010. EXPECTED OUTPUT The output, which is the conclusion of this dissertation, is expected to help the Government in its activities aimed at the nations economic development. It will also guide them in effective channeling of resources aimed at poverty alleviation. MFI administrators will also benefit from this work as it will help them in making decisions on how to enlarge their area of coverage and to also record higher returns through provision of other services. Donor Agencies and International institutions will also discover opportunities for helping in the economic growth and empowering the poor. Lastly, this study is expected to pilot other studies in this area and form a basis on which other people discover more efficient and effective ways of making microfinance have a lasting positive impact on economic growth.

Hilti cut or Fasten? Essay

This case review was executed about a case study that was discussed in class on the operations of Hilti and its surroundings – Hilti is a global corporation based in Lichtenstein that is a market leader in drills, saws and fastening products. The analysis looks at the development of Hilti ever since it was founded, and the different strategies which have been implemented to get them to where they are now. For a company that has been very successful which is now going through a period of recession, with sales decreasing which has been caused by a global financial crisis – a question for the CEO whether to hold fast and risk an investment loss, or cut costs to reduce the impact of a drop in profits. This report will provide an idea of Hilti’s current strategies and will look at the key strategic issues both internally and externally, and in conclusion will provide recommendations for what the CEO at Hilti should do moving forward. Hilti’s Business Strategy – Current The Current Business Strategy for Hilti has been quite successful since Michael Hilti took over from his father. Michael introduced the Champion 3C’s (Customer, Competence and Concentration) strategy in order to measure performance both internally and externally and saw the importance for a focus on the customers (external) and the product ranging (internal). â€Å"Hilti has set itself the goal of being a great company. The priorities set to achieve it are growth, differentiation, productivity and employee development† (Hilti Annual Report 2008) After conducting a Porters Generic Value Chain Analysis (Appendix C) it can be seen that the HR strategy in place at Hilti is very strong and must be working well. This finding can lead to assume that this strategy allows the company successfully look after their customers needs, being able to attract the right employees into the firm who bring along a positive attitude, good values and knowledgeable expertise. Eventually this will allow them â€Å"†¦to convert distinctive competence into competitive advantage† (Andrews, 1987). Hilti is known for utilising the most innovative technology and makes this a key focus during its R&D phase on emerging particular products. This helps Hilti to meet the company’s value proposition when the 2 pillars of ‘Customers’ and ‘Competence are also met (See Appendix 2). Looking at the analysis from Appendix 2 – It is highlighted that there are a number of resources that the company can influence to strive a competitive advantage. The value is added to the firm by aligning its strong value proposition with its strategy Strategic Issues (Internal/External Analysis) Unfortunately Hilti is currently challenged with a few strategic issues as the company is confronted with the current economic downslide. To identify the strategic issues both internal and external analysis was conducted by using the Business system tool (De Wit & Meyer 2010) which breaks down the resources and capabilities, activity system and their product offering (Appendix 1); Barneys VRIE model was used to assess the value, rareness, imitability and exploitation of key resources/capabilities (Barney 1995), Porters Five Forces model (Porter, 1985) was used to view the competitive environment and lastly a value chain analysis was conducted by means of Porters Generic Value Chain Analysis (Porter, 1985). Looking at the VRIE model (Value, Rareness, Inimitability & Exploitable) shown in Appendix 2 – although there are many resources and capabilities that Hilti does capture well for a competitive advantage, however when a closer look is taken you are able to see that there are many resources and capabilities which can be easily copied by a similar firm within the industry which leads to suggest that Hilti may possibly be able to be more competitive in its strategy. The findings from the VRIE are reinforced from Porters Supply Chain Analysis and the Business System Tool Model; as Hilti has built long-lasting customer relationships from being within the industry over a long period of time. From Porters Five Forces analysis in Appendix 3, it is evident that Hiltis’ surrounding environment is ever-evolving and fast moving and to stay and remain competitive in this field Hilti must keep up and with its research and product development to keep improving with innovation and technology. By staying ahead, continuously evaluating and improving Hitli can outperform competitors within the industry. Hilti is confronted with the following issues: Without a stable economy the value created may not be as effective within the industry – See Appendix 1) because if consumers don’t have the financial capacity to spend, then value to the consumer may change. Hilti must keep up or ahead with the innovation and technology that competitors are using within the industry – by looking at a sales approach from a social media sense, moving into E-business and shop-in-shop) as the current direct sales method is becoming out-dated. Hilti must look at aligning its Internal and external strategies as the economic crisis caused a decline in sales because customers were not confident to spend during this period (external), for this reason Hilti must work on improving its internal strategies such as HR, R&D, Sales etc Strategic Options and Recommendations The misfit gap between Hilti’s internal and external strategies increases over time and this gap needs to be reduced. For this to occur, Hilti must go through a process of strategic renewal. The below chart illustrates how strategic drift increases over a period of time, and only when strategic renewal strategies are implemented can this gap be decreased. Strategic Renewal Process De Wit & Meyer, 2010 Due to the changing nature and constant fluctuations within the strategic drift, regular strategies must be implemented to minimise the size of this gap. The Strategic integration Model (Fuchs et al, 2000) states the desire to make sure that all strategies complement each other. Many internal and external factors affect the strategic drift, such as competitors. These factors require Hilti to utilise and capitalise on techniques which are evolutionary, else the decline or delayed absence will be detrimental. After reviewing the above analysis the following recommendations are made; New innovative networks with the introduction of E-Business sector to make sure the sales strategy is getting out to as many potential customers as possible Authorise management to be able to make small changes immediately (revolutionary) – this will in order to keep costs down and increase profits Keep evolutionary changes to a low when it comes to the activity system to maintain the key attributes Keep employee levels at where they are now – disrupting this will affect the morale. The idea is to maintain a positive work culture and relaxed environment. The HR strategy should change to make sure no additional people are hired, instead the attention should be on growing and improving the current employees – this is to set the company up, so when the market recovers the company is in a better position. If these above recommendations are applied – Hilti can increase its competitive advantage and in turn alleviate the effects of the current Global Financial Crises. This will set Hilti up so eventually when the market does recover, the company will be stable and ready. Appendix 1: Business System Model Appendix 2: VRIE – Value, Rareness, Imitability & Exploitable Appendix 3: Porters 5 Forces Analysis Source: Porters 5 Forces: http://www.mindtools.com/pages/article/newTMC_08.html Appendix 4: Value Chain Analysis The Generic Value Chain (Porter, 1985), (De Wit & Meyer, 2010) Primary Activities Support Activities Hilti Annual Report 2008, De Wit & Meyer 2010. Reference List Andrews, K, 1987, The Concept of Corporate Strategy, McGraw Hill, Chapter 2. Barney, JB, (1995), Looking inside for competitive advantage, Academy of Management Executive, 9 (4), 49-61. De Wit, B. & Meyer, R.J.H. (2004), Strategy – Process, Content and Context: An International Perspective, 3rd edition, London: Thomson De Wit, B. & Meyer, R.J.H. (2010), Strategy – Process, Content and Context: An International Perspective, 4th edition, London: Thomson Fuchs, P., Mifflin, K., Miller, D. & Whitney, J. (2000). Strategic integration: competing in the age of capabilities. California Management Review, 42 (3), pp.118-147 Hilti Annual Report 2008 – Viewed online 30th July 2013 http://www.hilti.com/fstore/holcom/LinkFiles/Unternehmensbericht_2008_en.pdf Porter, ME (1985), Competitive advantage: creating and sustaining superior performance, Free Press, New York Porter Five Forces model – Viewed online 31st July 2013 http://www.mindtools.com/pages/article/newTMC_08.html

The True Story About Persausive Essay Topics That the Experts Dont Want You to Know

The True Story About Persausive Essay Topics That the Experts Don't Want You to Know Identity theft is an enormous issue for elderly men and women. Voting ought to be made compulsory. Immigration ought to be limited. Students need to be careful about posting on social networking. The Birth of Persausive Essay Topics For some, you will locate comments to provide you tips on how to proceed with the topics for persuasive speech. Making your audience feel comfortable is the secret to giving a thriving speech. For one to have the ability to earn a fantastic persuasive speech, an individual must select a topic that the listeners can relate to. The issue is what topic to select for your speech. Top Persausive Essay Topics Secrets Schools should not have a thing to do with ads. Life is far better than it was 50 decades ago. Possessing excellent research abilities and selecting a superb topic is vital. Speaking about something you understand well makes it a lot easier and enjo yable! The Foolproof Persausive Essay Topics Strategy Lastly, having gathered all of the material necessary for the speech, the speaker should pick the structure of the speech. Furthermore, he has to ensure that they do not alienate the audience even as they present their genuine perspective on the subject. First, he must ensure that they present a balanced argument without undermining their point of view. Ultimately, he wants to persuade you to do something. Persuasive speech refers to a certain kind of speech where the speaker has the objective of persuading the audience to accept her or his perspective. Silent letters in words ought to be removed. On the opposite side, obtaining a list of good persuasive essay topics is insufficient. It is difficult to thwart myths if you have little knowledge of those. The significance of research in persuasive writing can't be overstated. 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To begin with, if you're arranging a persuasive speech, you ought to think about a topic that could create mental pictures in the minds of your audience. The greatest persuasive speeches aren't written in a rush. It's best in the event you choose a topic in which you are in possession of a genuine interest in since you'll be doing a lot of research on it and if it's something which you take pleasure in the procedure will be significantly easier and more enjoyable. The issue, never theless, is that not all businesses can be relied upon in order to deliver quality essays on time so you need to be mindful in selecting one. It's good as they can easily find help and it may also stop them from doing something naughty. You may trust us to present expert assistance for many of your academic writing needs. Educated people ought to be asked to volunteer as literacy tutors. You may find there's a compelling argument for learning another language after all! Everyone on the planet should speak English. Every student should learn a minumum of one foreign language. Adoption needs to be encouraged. Topics that you're acquainted with will make it simpler to get ready for the speech. Domestic abuse awareness should be raised.

Early Childhood Journey - Free Essay Example

Sample details Pages: 3 Words: 986 Downloads: 8 Date added: 2019/03/13 Category Sociology Essay Level High school Tags: Childhood Essay Did you like this example? Maria Montessori is an icon in history. She has influenced my professional philosophy particularly due to her firm belief that there exists a difference in learning among children and adults. From this vein, Montessori once said: follow the child and let the childs interest take lead. This denotes the belief that through the stages of development the absorbent minds of children are exposed to learning experiences that are ideal thus facilitating the growth of their mind. Play Environments The healthy development of a childs brain is heavily influenced by creative and active play. As such, teachers are required to develop and sustain a positive learning environment for children both inside and outside the classroom. The wholesome development of children is supported by the aspect of play as it involves thinking, moving, sensing, creating and communicating with others (Feeney, 2016). Don’t waste time! Our writers will create an original "Early Childhood Journey" essay for you Create order Hard-Soft Environments: softness changes the environment in terms of comfort, security and the way of doing things in a context. Thus, early childhood classroom should be furnished with soft decorations, carpets, pillows, rugs, furry animals, soft toys, warm physical objects and sufficient lighting. Hard environments include colors that are unattractive, indestructible materials such as cement and insufficient lighting that denote disrespect for children. Open-Closed environments and materials: Innovation is inspired by open materials. Closed environments have the potential of being rewarding if they provide ideal challenges. Young children generally require open materials as they are easy to use. Closed materials are suitable for children that are older and have more experience. Frustration and boredom among young children denote an inappropriate balance between open and closed experiences. Low-High Mobility: Activity denotes high mobility while sedentary activities infer low mobility. Both kinds of activities should be encouraged throughout the day, both outdoors and indoors. Observation The role of teachers in facilitating play among children includes the provision of sufficient play time between 45 minutes and 1 hour of uninterrupted play several times a day. The activities can either be outdoors or indoors depending on the weather. The play materials should be sensitive to the interests and needs of children. Teachers should learn through observation and add materials to support play activities. Further, they should also participate in play but ensure that the children are the leaders. Unless there is a threat that can cause harm, play should not be interrupted. When guiding or participating in play the teacher should be child-oriented and avoid inculcating adult judgments and concepts into the play (e.g., How many are there? Was that nice?). Teachers also need to be able to redirect play (when necessary) in a way that supports the children. (Feeney, 2016) Curriculum Skilful curriculum design ensures that there are additional activities to the planned activities hence factoring space, time and interesting aspects that can be explored. Children should be provided with choices in a well-planned curriculum. The curriculum provides guided activities to engage with children individually and in groups. A planned curriculum factors all the domains of development. For example, it can be designed to help children master a skill in single or multiple subjects. In early childhood curriculum, each subject area contributes to all domains of child development but emphasizing on one or two study areas. Health Safety And Nutrition Some of the important aspects of supporting childrens healthy eating habits include: Food should never be used as a reward or form of punishment. All children have a right to food and thus withholding it leads to a breach of trust. The eating environment should be pleasant and relaxed. Meal times should not be hurried and should involve everyone taking part in the activity. Develop appreciation of healthy food through compliments such as Yum, these crunchy carrots are delicious,. For new healthy food: We never had this for lunch before†Im looking forward to trying it. Children should be provided with opportunities to try unfamiliar foods. According to Eliassen (2011), young children required 10 to 15 experiences with unfamiliar food to enjoy it. Train Children to listen to their bodies and hence know when they are full and when hungry. When possible, children should be encouraged to opt for healthy snacks thus gain control of their eating habits.Food preparation and cooki ng should be entrenched in the curriculum by giving the children opportunities to wash and tear lettuce salad for example.Children should be allowed to serve themselves and if this is not possible have them offer snacks as a self-service activity to nurture competence among them.Children should be involved in meal set up and cleanup activities.Food and nutrition should be a topic of discussion with the children e.g. on how food helps in body growth or the significance of certain foods such as Milk has calcium in it. It helps your bones grow and be strong.Ensure families have access to resources for meal and food planning. Mention some of the ideal healthy snacks for children in newsletter besides share recipes that children have enjoyed preparing while at school (Feeney, 2016). Family Partnerships Keyser (2006) noted that the most productive programs for early childhood education are those where the unit of the family is valued by both teachers and administrators. In such cases, the staff ensures they develop relationships, make decisions and policies that treat each child as a part of a family. This practice is child-centered and focuses on developing meaningful relationships between the families and the teachers (Keyser, 2006). Family-centered programs require constant communication with each family and subsequently making decisions aligning to their preferences. Thus, the practice is intentional and significant. This practice goes beyond focusing on the child only but also the respective families involved hence the need to understand differences in cultures. Through interaction, teachers learn the different foods, holidays and environments the children are brought up in. Teachers should seek the help of families in the quest to support each childs needs. The dialogue can be gin by asking families to inform you on how birthdays and holidays are celebrated.