Historical Overview.

Ms : Heba Hassan - +249906850429

Microfinance is nothing new communities worldwide have developed their own financial systems which enable people to mange shortfall of cash and provide lump sum amount for particular accessions and safe places to save . For ex

Rotational saving and credit saving associations (ROACAs)

History

Where group members pay a certain sum into a common put every week and a different member takes the money each week are common throughout the world

Informal credit markets where rich individuals will lend to others at high rates but without collateral are similar widespread

In many places these are the only financial services available to poor people ,but in other they co-exist with mf program

Making use of social collateral there was little knowledge among formal sector financial

intermediaries of alternative to physical collateral until the1970s when grameen bank in bangladesh began using peer group monitoring to reduce lending risk

Modern mf

. However, the pioneering of modern microfinance is often credited to Dr. Mohammad Yunus, who began experimenting with lending to poor women in the village of Jobra, Bangladesh during his tenure as a professor of economics at Chittagong University in the 1970s. He would go on to found Grameen Bank in 1983 and win the Nobel Peace Prize in 2006. (http://globalenvision.org)

Since then, innovation in microfinance has continued and providers of financial services to the poor continue to evolve. Today, the world bank estimates that about 160 million people in developing countries are served by microfinance. (http://web.worldbank.org)

1950 :total Depended on the informal sectorMoney Leander play a major role

Growth of the micro finance

From 1950 governments and international aid donor subsidies credit delivery to small farmer in rural areas of many developing countries . It was assumed that poor people found great difficulty in obtaining adequate volumes of credit and were charge high rate of interest by money lender.

Development finance institutions , such as agricultural banks were responsible for the delivery of cheap credit to poor famers

depend on donor program CBOs Agriculture banks

1950- 1970

Turn into mf program based on commercial basic

There’s a success international experience (Grameen bank , Rakyat ex)

1970-1995

Since the 1980s development theories have increasingly argued for the provision of small loan to micro-enter preneure as an effective policy instrument in the fight against poverty

During 1990 the provision of financial services dealing with very small deposit and loans mf and particularly the provision of micro credit have been increasing as in effective means of poverty reduction

There is continuing and quite rapid improvement in understanding how financial services for poor can best be provided

1990

Expanding in systematic MF biased on commercial basic with formal and informal sector

until now

Refences Dr isalh note C gap

note