Development of Microfinance Essay

8227 WordsApr 14, 201533 Pages
The Development and Impact of Microfinance on the Economic Growth of China Abstract Microfinance is an aspect of financial development that most states have used to stimulate key sectors of the economy. Since its introduction in china in 1993, microfinance has undergone a lot of revolution. In the process of revolution, it has also had tremendous impacts on the economic growth of china. To determine how the development of microfinance has impacted on economic development of china, this study focused on specific objectives. Firstly, the study sought to explore the contribution of various phases of the development of microfinance in China to the Chinese financial sector. In this case, the period between 2000 and 2006, also called rapid expansion had significant impacts on development of microfinance on china. However, the role of other phases is also examined. In attempt to explore how microfinance has impacted on poverty, the study reveals controversial findings where, despite aiming to help the poor people, these funds are diverted to the rich people in the society. However, the main impact of microfinance on economic development is creation of employment and enhancement of income. CHAPTER ONE INTRODUCTION Background Information Microfinance is the provision of the financial services to the poor members of the society, especially those who have limited ability to access finances through conventional financial organizations like banks (Brau & Woller, 2004). Whereas most banks provide credit only, microfinance institutions provide other services such as market information, awareness building, training, education, remittance, insurance and deposits. To achieve the objective of microfinance, various regulations have been established in different economic and political milieus, which have also been used in the context of China with specific adjustments to

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