Micro Credit Facility In Turkey Essay

3860 words - 15 pages



A Brief History

Microfinance emerged in the 1970s, as social innovators began to offer financial services to the working poor, who were previously considered "un-bankable" because of lack of collateral and low creditworthiness. Once given the opportunity, not only did clients of the MFIs expanded their businesses and increased their incomes, but their high repayment rates demonstrated that the poor are capable of transforming their own lives given the chance.

Yunus launched the idea of the Grameen Bank after he returned to Bangladesh from the United States to take a teaching job in the economics department at Chittagong University. Alarmed at the poverty created by ongoing famine, he and his students started an experimental project extending a loan of $27 to women for buying straw to make small furnitures. In 1976, Mohammed Yunus started with the Grameen Project and later in 1980s evolved the Grameen Bank.

Some Innovative Endeavors Defying Conventional Thinking:

The Grameen bank not only defied conventional lending rules by making loans to the poorest of the poor, but also challenged the cultural taboos, by giving most of the loans to women in a Muslim dominated society where rural women at the time were seldom allowed to touch money or work outside of their homes. The bank issues most of its loans to women because Yunus discovered that they spent their money more carefully and paid back the loans in far high percentages than did men.

Some years ago, the bank started a program to give beggars or "struggling members" lines of credit of about $9 to purchase small items such as bread, candy, pickles and toys. Recipients of the loans then resell the goods "to supplement their begging," according to the bank's description of the program, which is intended not only to empower beggars, but to boost their morale and dignity.

Micro credit - The Salient Features:

Microfinance generally involves the following features:

*Small size of loans: The size of the loans is small and usually constitutes less than $100. The amount of credit can be used for both working capital management and acquiring assets.

*Collateral free: The most remarkable feature of micro credit is that it is free from collateral security. But however we know that micro credit is no charity the security of repayment is substituted by group guarantees, compensatory savings and peer pressure.

*Access to repeat and larger loans: Each time the borrower makes full repayment of his/her loan they are eligible to avail the facility of repeat loans and can take credit of higher amounts.

*Loan period: The loan is usually short term in nature generally starting from1 year and may extend to a period of 3 years.

*Repayment: Options available for weekly, biweekly or monthly repayment of the loan.

From Credit to Enterprise - A Microcredit Structure:


Find Another Essay On Micro credit facility in Turkey

MicroFinance Essay

1072 words - 4 pages development of the underdeveloped nations. By giving the small loans to the poor people micro institutions help them to switch from the poverty line and from unemployment to self employment. Throughout the world the micro credit is provided either on individual basis or by the group based methodology. In the group based methodology the loan is provided individually. These individuals instead of providing the collaterals have to make a group of

A Brief History of IMF programs in Turkey and The Reasons Behind Their Ineffectiveness with The Analysis of 2001 Financial Crisis as an Example

1705 words - 7 pages should analyze the political implementation of the IMF programs in Turkey. The domestic politicians had generally "opportunistic " approaches.11 They tended to take the full credit for the economic improvements of the stabilization programs failing to acknowledge the IMF's contribution whereas they tended to blame the failures of the programs solely on IMF. This scapegoating was apparent in the 2001 financial crisis. Since the debut of the

Turkey, A Poli-Historical Analysis

2175 words - 9 pages Geographic BackgroundTurkey occupies a region partly in Europe and partly in Asia. European Turkey, known as eastern THRACE, is bounded on the north by the BLACK SEA and Bulgaria and on the west by the AEGEAN SEA and Greece. It is separated from Asian Turkey (ANATOLIA or Asia Minor) by the BOSPORUS, the Sea of MARMARA, and the DARDANELLES Strait. Anatolia is bounded on the north by the Black Sea; on the east by Georgia, Armenia, and Iran; on the

The Production, Distribution, and Consumption of Turkey Food Products

1443 words - 6 pages Thanksgiving is an annual national holiday marked by religious observances and a traditional meal including turkey. In Charles Mann’s National Geographic article, America Found and Lost, discussed the first known Thanksgiving holiday dinner in English America. It was celebrated on December 4th, 1619 at Berkely Hundred, a brand new plantation around thirty miles west of James town. During the first Thanksgiving dinner the colonists ate a rather

Turkey's Internal Conflict and the Kurdish Minority

1269 words - 5 pages happened from an internal point of view. The Turkey-Kurds conflict could be described using various levels of analysis: At the micro-level, influences on decisions is determined by the structure of the Turkish government: Since the foundation of the Turkish state in 1923, the Turkish government has to cope with the policy born with the Turkish republic itself, that the national population has a single identity, that of Turks. So when Mustafa

The History of Micro-Credit as a Means for Development of Poor Nations

1689 words - 7 pages businesses from micro-loans. A year later in 1993, Rashtriya Mahila (RMK or the National Credit Fund for Women) was established. RMK was used to distribute credit from NGOs to self-employed women in the unorganized sector. By March 2001RMK has helped almost 1,100 NGOs provide around Rs 72.6 crore (726 million) to 393,000 women. In 1995, the government of Andhra Pradesh passed the Mutually-aided Cooperative Societies (MACS) Act. This act helped in

Turkish Economy

2459 words - 10 pages International Monetary Fund (IMF--see Glossary) guidelines. These measures usually led to sufficient improvement in the country's external accounts to make possible the resumption of loans to Turkey by foreign creditors. Although the military interventions of 1960 and 1971 were prompted in part by economic difficulties, after each intervention Turkish politicians boosted government spending, causing the economy to overheat. In the absence of serious

Two different countries in two different continents. One of them

1340 words - 5 pages production. In second position is the Italian oil company Agip. In 1994, there was a devaluation in Congo and then, they started to reform their economy including reforming the tax, investment, and labor as Turkey did in 1980s. To achieve their goal IMF ratified a 3-year Enhanced Structural Adjustment Facility (ESAF) economic program in June 1996. There are lots of agreements signed between IMF officials and Congo's governments since 1960s. As

Is Digital Cash Something To Fear?

1499 words - 6 pages "smart cards"{3} or personal computers, promises to make micro-transactions possible in both the everyday world and in cyberspace. II. IS DIGITAL CASH NECESSARY? The need for digital cash closely parallels the need for regular cash. Most people do not use regular cash to make major purchases. Carrying large amounts of cash can be very insecure. Carrying credit cards is more secure because, at least in the United States, laws limit consumer

3.3 Local currency

1621 words - 7 pages particular area. Managing of local currency operate to finance micro credit for producer and micro credit for customer. Both direction of financing stimulate to flow a cycle to invest and consume regional economical sphere between local inhabitant and local business. According to Community Bank and Community Association as Institutional Ecology —A Case Study of Palmas Bank in Fortaleza, Brazil—,this material explain to arise process of stimulating


686 words - 3 pages potential impacts of micro-credit programs on poverty alleviation. Some people might argue that the level of extreme poverty has hardly changed over time in rural areas. For instance, widespread poverty and malnutrition continue to exist in Bangladesh In 1997, poverty alleviation remains controversial. Despite these controversies, I find that the micro credit programs have had a positive impact on household welfare in a number of ways. The quantity

Similar Essays

Micro Credit Development Plan Essay

3860 words - 15 pages Untitled MICRO CREDIT A Brief History Microfinance emerged in the 1970s, as social innovators began to offer financial services to the working poor, who were previously considered "un-bankable" because of lack of collateral and low creditworthiness. Once given the opportunity, not only did clients of the MFIs expanded their businesses and increased their incomes, but their high repayment rates demonstrated that the

Microcredit: A Lifeline For The Poor

2326 words - 9 pages India, "Micro Credit is defined as provision of thrift, credit and other financial services and products of very small amount to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improve living standards."Many bankers, economists, and governmental officials assume that the informal commercial credit market works efficiently, satisfies demand, and helps the poor. Widespread use of informal finance

Micro Credit Essay

810 words - 3 pages have seen some big successes, so it's no wonder that so much is expected.Still, we need to ask what micro-credit really means for poor women? Just how far does it go towards alleviating poverty? Are all participating NGOs indeed following in the footsteps of SEWA and Grameen?Not everyone has hoped on the micro-credit bandwagon. The following viewpoint, excerpted from "Micro-Credit: Band-Aid or Wound"? by Kavaljit Singh, Nan Dawkins-Scully and

Can Micro Loans Help Reduce Poverty In Developing Countries?

1329 words - 6 pages , the effective reduction of poverty program is being successfully carried without any barriers. Reach and Empower Women:- Majority of women’s in the world are poor. By increasing the standard of living of the women there are chances for the sequential development of the country. So Micro Loaning of Financing believes that providing credit to women would enhance the economic development. The provision of access rights to infrastructure, credit