A case study of Grameen Bank Assignment

Dissertation

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TITLE: “How does the development of micro-finance institutions help to
improve the living standard of poor people in Bangladesh. A case study of
Grameen Bank."
CHAPTER 1: INTRODUCTION
1.1 Background to the research
Micro finance is the concept of business work targeted at individuals and small business
concern who need approach to conventional banking and associated facilities. It includes micro
credit which gain attention of large number of poor people towards Grameen bank and reach
with desired goals. An organisation used this method in order to fulfil all needs and requirements
effectively. For long time period, various researchers have been used micro finance activities
which alleviate poverty by developing income and jobs. Micro finance has been increasing
quickly which main goal is to assist group out of poorness and boost economic development
(Bondinuba and et. al., 2016). Its main function and importance has been amplify the global
financial situation when trust into formal banking system. Despite from this, global identification
and quality of micro finance where there is integrated grounds of their net profits and it is very
work on their contributions to financial intermediation and gaining economic growth. Micro
finance refers as a large number of different financial products which includes micro credits,
micro saving, micro insurance and remittance management. For example, UK country micro-
finance institutions helps in making the economic status of development nations effectively. A
micro finance institutions is an organisation which offers business services and facilities to low
income group. This will play an essential part in bridging the space between the conventional
financial organisation and the rural poor (Jose and Chacko, 2017).
The micro finance is directly influence on entrepreneurship and it emphasis the current
research which does not provide sufficient justification for the connection between micro finance
and entrepreneurship development in various developing countries. This is mainly concerned on
gaining financial growth and success in order to reach with desired goals and objectives
effectively. There are various micro finance which are provide loans on increasing entrepreneurs
income and innovation. It is associated with accurate business skills, technologies, information to
be offered by micro finance with careful screening and monitoring in make sure about effective
utilitarian of loan capital. This is based on an assumption which combines the poor into
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economic circuit, the micro finance was helpful in promoting development and growth. The
origin of Micro-finance has started in the year of 1976 by Muhammad Yunus in Bangladesh. It
has positively effect on poor people as well as societies. Grameen Bank (GB) provides micro-
finance services and facilities for people in the rural areas so that they can use capital for
productive activity and it will being financially stable and independent. The report is based on
Grameen Bank which is micro-finance administration and people improvement bank which is
based in Bangladesh (Najmi, Bashir and Zia, 2015). This makes small loans to impoverished
without any collateral. Along with this, an investigator will understand research aims and
objectives which assist in finishing the study. Literature review describes different writer and
scholarly person views or opinions regarding research topic. It is used for describing and
evaluating investigation project which assist researcher in order to conduct appropriate research
report. In this, data analysis is helpful in examining various respondents views and reviews
regarding bank services and facilities which are offered by them.
1.2 Organisational Background
Grameen Bank is a micro-finance organisation and society evolution bank which was
founded in Bangladesh. This will provide small loans to make improvement without requiring
collateral. Grameen Bank regulated and originated in 1976, who establish a investigation work to
survey how to plan a assets transfer scheme for rendering banking facilities or work to the
agricultural poor. The bank was authorised by national government for modulate and run as an
self-directed bank in Bangladesh. The total number of creditors are around 8.4 million and 97%
are only for women. In the year of 1998, the Bank's “Low cost Housing Program” won a World
Habitat Award. In addition to this, in the year of 2006, the founder of bank who is Muhammad
Yunus were collectively honour the Nobel Peace Price. It was discovered that the bank has
increase its finance from various types of methods and these sources are also changing from time
to time. When this bank was opened, the donor agencies used to give the capital to them in bulk
at low rates (Fofana And et. al., 2015). This bank was basically founded on the principle that
instead of giving charity, taking loans is a better option in order to promote business or
agriculture. Therefore, this bank provides opportunities to people who belong to lower class,
illiterate, unemployed etc. so as to motivate them to do business.
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1.3 Significance of the Problem
The main issue in this research report is that living standard of poor people which is
situated in Bangladesh. Grameen Bank is micro-finance organisation which assist in developing
and make improvement in living standard of poor individuals. The situation present in that
country needs to be improves otherwise the people living their might face severe issues in near
future. The respective bank require to identify standard of living of people where they need to
develop effective strategies and policies (Garikipati, 2017). It will assist in reducing poverty,
income distribution and achievement of millennium development goals (MDGs). Micro-finance
is reasoned as one of the most essential and effectual execution for poorness alleviation. Once,
the problem is identified then it will become easy for the institution to motivate the individuals to
do business so as to improve their standard of living. For doing business, loans will be provided
to then by the bank.
1.4 Statement of the Purpose
The primary aim of this study is to examine detailed information about people who
required money for living their life along with basic needs. Grameen bank provide capital for
those people who does not survive their life in better manner or who are in the need of money or
who have no hopes of getting money from anywhere to do their business. In Bangladesh, there
are around 26.4 percent people who are living in rural areas and approximately 18.5 percent are
survived in urban areas (Islam, 2016). The current rate of intense poverty is 12.9% as compared
to 17.6% in six years ago. For make improvement in living standard of people, Grameen bank
should provide small loans to the needy people who live in Bangladesh without any basis
requirement. Along with this, such investigation is conducted for analyse rate of poor people and
provide them necessary services or facilities in Bangladesh. This initiative of bank will help
them in raising the living conditions of people who are situated in that country.
1.5 Statement of Problem
The main issue in this research report is that there are number of poor people who are
below the poverty line. Also they does not survive or endure their life with required facilities and
services so that Grameen bank provide them small amount of loans. With this, country people
can easily change their standard of living by taken loan from Grameen bank. This will assist in
evaluating and determining their strategies or policies which are helpful for make improvement
in standard of living of poor people.
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1.6 Research Aim
This is considered as one of the essential section of an enquiry because there is not any
purpose where way are conducted and continue effectual. It will discuss as an issue and problem
which is faced by organisation and it is required solution that can assist in easy to reach with
higher development and financial gain level effectively (Jamal, Raihana and Sultana, 2016). This
part of dissertation helps in studying the entire research in correct direction so as to make sure
that accurate results are achieved.
Aim: “How does the development of micro-finance institutions help to improve the living
standard of poor people in Bangladesh. A case study of Grameen Bank."
1.7 Research Objective
In this section, it is termed as vital part through which this define goals of an organisation
in order to reach with desired customers. This is helpful for researcher because through this they
are capable for determining or evaluating entire investigation project in better manner. Such
objectives are developing strong connection with customers as well as organisation which help
investigator for conducting research process. The research objectives are described as follows:
 To describe the meaning of micro-finance institutions.
 To provide classification of micro-finance institutions.
 To preview importance of micro-finance.
 To evaluate theories and models of micro- finance.
1.8 Research Questions
In this part, questions are formulated and developed by researcher as per the objectives so
that they have created such things for themselves. It can be examined that it is most essential part
of research report by which they are easily able to understand and evaluate an investigation in
better way (Cervelló-Royo, Moya-Clemente and Ribes-Giner, 2015). It is more essential and
important part of research which will help an investigator to address all objectives of study
systematically and successfully. The research questions are explained as follows:
 What is the definition of micro-finance institutions ?
 What are the classification of micro-finance institutions ?
 What is the importance of micro-finance ?
 What are the theories and models of micro-finance ?
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
Literature review is academic paper which provide in-depth knowledge of specific topic.
In this part, an investigator gather and collect data and information from various sources and
represent it in an effective way in front of reader. In this, researcher express knowledge on
respective topic from author's view and opinions (Porter and Kramer, 2019). This section
provides in depth knowledge to scholars regarding current study or research on same topic.
Therefore, it has been identified that literature review is the best way in order to evaluate
particular topic effectively.
In literature review, researcher evaluate the impact of development of micro-finance
institutions help to improve the living standard of poor people in Bangladesh. The literature
review portion covers the specific research topic along with sub sections which evaluate the
overall impact. In the beginning, it will reflect knowledge importance of free movement for
recruitment sector. A literature review is simple summary of sources but it is generally has an
organisational structure and integrate both summary and synthesis. In this, summary is the recap
of important information of source but a synthesis is a re-organisation, or a reshuffling of such
information. It will gives a new interpretation of old material and it combine new with old
interpretation. This will provide a brief summary of literature review which assist in analysing
and examining different authors views and opinions regarding specific research topic.
2.2 Definition of Micro finance institution
As per the view of Songbae Lee, Micro means small and finance is related to money. So,
Micro finance is a short term banking service which facilitates loan to an individual or group
who have low-income or unemployed. Micro finance can also be called as microcredit, which
directly refers to small loans to every needy person, who can start at ground level work for the
growth of a living standard. Grameen Bank plays a vital role in providing loan to small workers
or a needy person who get something of the ground to maintain standard of life. In a nutshell,
Grameen Bank facilitates micro finance to an individual or a group which help in the beginning
of ground level of work (Islam, 2016). The Micro finance institution which takes part in
providing lending and give an additional services to maintain an institution which scatter loans to
all needy people, as to give growth in the economy. Grameen Bank is one of the institution
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which provide loan to thousand of people who are unable to invest a lump-sum amount in
building better agriculture or a small business. Lump-sum payment is amount in bulk, which can
invest in any investing activity or in growing a business in an appropriate manner.
Grameen Bank, which started in Bangladesh to promote the lower section of society. It is
a community development bank to maintain a balance between the economy as to provide
Microcredit or Grameencredit (Etuk, Etuk and Michael, 2014). The word Grameen denotes to
gram which directly linked to villages and showcase a welfare of villagers, which is known as
community development bank. The system of the bank comes from an idea to maintain a
standard life in villages as villagers have skill to fulfil dream, but have no money to invest into it.
Business like fabric, telephone and companies of energy are controlled by Grameen Bank.
Micro-finance is mainly considered as one of the effective and appropriate tool for
reducing poverty by enabling micro credit to the financial poor. It is play an important role in
developing the space between formal financial association and the rural poor individuals in the
country. The Micro finance Institutions (MFI) which considered as the financial resources from
banks and various other important funding organisation which help in giving services to the poor
people (Dhaoui, 2015). It is the pivotal overseas organisation in every nation which develop an
individual micro credit debt immediately to small town, micro-entrepreneurs, demanding women
and poor social unit. MFI is like a small bank along with similar issue and capital requirements
which confronting any expanding small venture but along with added responsibility of serving
economical marginalised populations. There are various types of institutions which offers micro-
finance such as credit unions, commercial banks, NGOs (Non Government Organisation),
cooperatives and sectors of government banks (Khatun and Hasan, 2015). In other words,
microfinance sector is mainly focus on understanding and evaluating actual needs of poor and
developing better ways in order to deliver effective services in line with their requirements. They
are processing most economic and effectual tool to supply funds to the miserable people. It is the
provision of saving accounts, insurance, loans, money transfers and various banking services to
the desired customers which lack in access the traditional financial services or facilities.
According to the view of Caleb Levell, micro finance is the term which is used in variety
of context among banking and non profit aid practitioners, an investigators from varying
academic disciplines and organisation in both private and public sectors. Microfinance define as
delivering financial services to the low level income people, specially in relation to poor and
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needy individuals in order to develop regions all over the world (Boateng, Boateng and Bampoe,
2015). In current time period, microfinance services include with advanced spectrum of financial
method which assist in low income individuals and families in order to make improvement their
quality of life and financial reliability. With the help of microfinance, Grameen bank can easily
provide services and loans to the needy and poor people who are not able to live their life in the
nation. Microfinance is a type of baking service which provided unemployed or low income
individual and groups which have no access to manage financial services. At the time, when
institutions are taken part in this region of microfinance which mainly provide lending and some
banks are offers extra services that includes checking and saving accounts. Along with this, they
are also provide financial and business education. The main goal of microfinance is to give
opportunity to needy people which help in being self sufficient.
Micro finance institutions are offer services to unemployed and lower income people
because most of them are cornered in poverty and those who have small financial resources, does
not have adequate income to do business with traditional financial organisation (Ihugba,
Bankong and Ebomuche, 2014). In addition to this, microfinance allows people in order to take
affordable loans and do their business in better manner whatever they want. Grameen bank
support number of activities and functions that range from providing basics such as bank
checking and saving accounts to start up the business. Such program are mainly focus on such
skills such as bookkeeping, cash flow management and technical or professional skills such as
accounting (Hulme and Maitrot, 2014). It can be analysed as one of the most accomplished and
well known microfinance institutions is Grameen bank. They are provide required services and
facilities to the country people who are willing to acquired.
2.3 Classification of Micro-finance institution
Microfinance refers as the financial services for poor and low income customers. They
are giving their most attention on the condition of small debt, microfinance includes other
primary business services which involves savings, money transfer and security for poor group
(Quinones and Remenyi, 2014). In this, rising access to such services and facilities allows poor
and low financial gain group to finance income creating activities, create assets, stabilise
consumption and security against danger. Microfinance play an essential role in improving
standard of needy people.
Classification of Microfinance Institution:
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According to the view of Priya Chetty, The microfinance models was developed in order
to cope up with the financial challenges and issues in financially backward areas. There are
various types of microfinance institutions which are described as under: Joint Liability Group (JLG) – It can be defined as the informal group which consist with
four to ten individuals who are try to avail loans against mutual guarantee from banks for
the purpose of agricultural and related activities. This is generally consist with tenants,
rural employees and farmers (Akotey and Adjasi, 2016). They are work for lending
purposes, although they are offer saving facility and services. In this type of institution,
an individual of borrowing group is equally responsible for credit. Along with this, it is
that type of institution which is simple in nature and need small and no financial
management. Self Help Group (SHG) – It is the kind of formal and informal group which consist with
small entrepreneurs along with same type of socio economic backgrounds. In this, some
person are temporarily come together and generate common funds in order to met with
emergency needs of their business (Kapoor, 2014). Such groups are considered as non
profit organisation. The main advantage of this micro lending system is that there is no
need for collateral. In this, interest rate is low and fixed particularly for women.
 Rural cooperatives – It was set up with the time of independence by the government.
They are used mechanism to pool various resources of people which are comparatively
small define and it provide financial services (Ravi and Engler, 2015). In addition to this,
system are catered to the credit worthy individuals of rural areas, which is not cover a
large part of nation's financially backward parts.
2.4 Importance of micro-finance
Microfinance is the provision which has brad range of financial services such as loans,
deposits, payment facilities, money transfers and insurance to poor and needy people.
Microfinance defined to include such services which are provided by both formal and
semiformal institutions. Along with this, poor and low income families and their microenterprise
has different groups. The demand for microfinance services reflects their diversity. The main aim
of microfinance is to supply business services to group which is broadly excluded from
conventional finance service sources because of their low, improper and unpredictable outgo.
However, microfinance is providing loans, credit, access to saving accounts even insurance
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policies and money transfer to small business owners (Arouri, Nguyen and Youssef, 2015). The
term microfinance consist with micro-loans, micro-savings and micro-insurance. It is important
because this will provide resources and access to capital financially underserved such as those
who are unable to get checking accounts, line of credit and loans from traditional banks. Without
microfinance, some of the groups are resort to use loans advances with extremely high interest
rates and also borrow money from their family and friends.
Microfinance is the bringing of financial status of poor and low level funds with
restricted approach to ceremonial business organisation. It can be described as the banking for
underprivileged. It can be analysed that microfinance is the best way to help people in became
entrepreneurs. This will provide underprivileged with maintainable income by low interest loans.
The organisation businessman fancy personalized saving and credits from cooperative societies
to microfinance banks and commercial banks fund which are stated with high interest rate.
Microfinance is the condition of wide scope of financial services such as debt, deposits, cost
service, wealth transportation and security to poor and low income family. The demand for other
financial services among poor and low income households and their microenterprise can be
significant. A microfinance institutions provide account service and facilities to their customers
who are not able to survive their life in better manner. Microfinance advised as one of the most
effectual instrument and tool which assist in reduction of poverty and accelerative living
standard of people. MFIs is important for reaching with desired and needy people who are
required funds and capital for living their life in the respective country. There are various types
of microfinance such as credit unions, commercial banks, NGOs (Non government
organisations), cooperatives and sectors of government banks. Grameen bank mainly focus on
understanding and evaluating the need of poor people and making amended ways of delivering
services in form with their necessitate, processing most prompt and effectual performance to
render finances to poor.
The Grameen bank is a microfinance organisation and community development bank
which are make small loans to the needy people to the impoverished without required collateral.
Microfinance institution is the financial institutions which is specialised in banking services for
low income groups and an individuals (Banerjee and Jackson, 2017). This will provide
accounting services and facilities to Grameen bank which is not normally accepted by traditional
banks, and also offers transaction services for money. According to the view of Sayed Samer,
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Microfinance is became a meaninglessness in the recognition marketplace which is reasoned as
effectual tool and method for reduction of poverty and socio-economic development. In this, idea
of provide extremely poor people with small loans so that they can start and operate their
business in large market place. It will assist in support in keeping financial safety because it is
not just a contribution and trust. It is the key strategy in supporting living standard of people
which became financially independent, that assist them in becoming more realistic and capable
to provide services for their families. According to the view of Rachel morgan cautero,
microfinance encompass microloans, micro savings and micro insurance. Microfinance
institutions provide small loans and other resources to business owners and entrepreneurs which
assist them to get their businesses off the ground. They allow entrepreneurs to have a saving
account.
Poverty reduction
Microfinance is increasingly being considered as one of the most effective tools of
reducing poverty. It will play an essential function in bridging the disparity between ceremonial
financial organisation and the farming poor (Chliova, Brinckmann and Rosenbusch, 2015).
MFIs approach fiscal resources from the Banks and other thought financial institutions and this
will render financial and assist work to the poor or necessitous people. Grameen bank provide
loans to the poor people which reduces poverty level and this will increasing standard of living.
Poverty reduction is the main aspect which must be eliminated for make people happy and
satisfied with all services.
Increase household income
This will assist in enhancing household income when Grameen bank provide basic needs
and wants to the people. Along with this, it will helps in managing and maintaining people life
which are improved day by day. It is offer variety of services and facilities that are used for
increasing household and family members income or revenue (Deen, 2015). Along with this, it
will assist in increasing household income when government are provide large number of
employment opportunities for country people. For increasing income, it is important to help
struggling household which is lead towards meeting with desired goals and objectives.
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Women Empowerment
It consider as an activity of increasing the position of women through education,
increasing awareness, upbringing and accomplishment (Pakistan, 2010). Women's empowerment
is all about mobilisation and allowing women in order to form life determinant conclusion with
the help of various issues in community or society. Grameen bank provide loans to small town
women's who are capable to do business in order to being independent. As per the view of
H.Lalnunmawia, microfinance is the important tool which assist in heighten women
empowerment for its all signal such as family economic determination devising, judicial
awareness, mobility, economic safety and condition and family decision making. It will assist in
motivate women in order to became independent and make their own decisions regarding their
future life and career. It is appear as a muscular way for women empowerment in the new
country.
Encourage Entrepreneur
Grameen bank is the financial institution which provide funds help to the needy and poor
people in order to survive their life. They also promote entrepreneurship where they are offer
loans to those people who are try to start their business for earning profit and income. The bank
are offer financial services and facilities which fulfil their needs and requirements relates to
business operations and other activities. Grameen bank motivate and encourage people for start
their own business which assist in increasing growth rate of Bangladesh country (Imoisi and
Opara, 2014). Microfinance institutions are offer non financial services such as entrepreneurship
related knowledge and information. In addition to this, financial services are impoverished
borrowers at the bottom of pyramid. However, Microfinance is offer various services and
knowledge in order to encourage entrepreneurship among impoverished.
Self Employment
A self employed individual doe not work for specific employer who pays them consistent
salary or wages. In this, an individual or independent worker earn income by contracting with
trade and business directly. Grameen bank provide opportunity to poor and needy people for
establish their business by offering them capital and funds. The micro finance institutions are
provide wide range of job opportunities along with this they are motivate people towards being
entrepreneur (Torri and Martinez, 2014). This will help them in increasing their abilities and
knowledge for doing something good in order to develop economic growth of nation.
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Increase literacy rate and decrease malnutrition
With the help of micro finance institutions, Bangladesh can easily improve their country
literary rate where all the young people are educated and qualified. This will increasing nation
literacy rate among people. It is great ground to pool teaching with microfinance in order to
eliminate poorness among country people. Poverty is dangerous which impoverish group of their
rights to instruction, their correct to great wellbeing (Wossen and Berger, 2015). The literacy rate
is increased when government are provide proper education system to their country people.
Along with this, it will assist in motivate and encourage people for consuming appropriate
nutrition of food.
2.5 Theories and models of micro-finance
Micro finance is a kind of finance service that is render to unemployed or low income
individual or groups as well as in order to access other financial services. Basically, it are the
service provider to unemployed or low in income individual as in today's context of them are
trapped in poverty or else who have limited financial resources. It usually allows general people
to take small business loans safely and in an ethical manner which consist of ethical lending
practices (Klapper and Singer, 2014). It supports both small and large number of activities that
range from providing basic services such as saving accounts as well as providing loans to start up
capital for small business enterprise, educational programs that teach principles of investing. It
usually focus on bookkeeping, cash flow management, and technical or professional skills which
is concerned with borrowing . Herein, micro finance main motive is to help an organisation to
succeed in competitive edge.
As per the views of Elisabeth Rhyne, micro finance is vert popular term in toady's
business market. It refers to micro credit to finance or business service that are offering by some
banks or other financial organisation to individuals who specifically consist to low income group
or deprived area of society. It can be any form such as savings, insurance, loans and deposit etc.
Eventually, it is a great way to help poor individual in order to become financial dependent.
Herein, in such case they can use their funds which are offered by banks or other financial
institution at low interest rate for their small venture in order to make their dream come true
(Chowdhury, Azam and Islam, 2015). Micro financing is one of the most reliable institution that
manage their money on their own so that they can utilise their fund in an effective manner. They
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help in all type of business such as in buying instrumentation or conveyance of advanced charge
that are essential for carrying out enterprise .
Micro financing is defined as procedure that provide effective loans, credit facilities and
various required funds services which re mainly offer to poor people in order to give them
accurate finance from banks and other institutions of finance. It is a practice of extending a small
loan or other form of credit, savings, checking or insurance products to individual who are not
able to generate capital of their own (Szirmai, 2015). This allows an individual to execute their
business and become financially self-reliant so that they can work their own into better surviving
state. Apart from this, it do have certain benefits of micro-finance in developing countries where
each and every one are getting involved in this form of lending. Which are determined below:
 Micro-finance is typically offered by banks to any bone who dose not have any method
of financial income due to lack of unemployment. It is given in proper from of
documentation to the need and poor people in an effective manner (Idris and Agbim,
2015).
 It dose not need any loan utilization to suggest any kind of indirect while applying for
the loan its is one of the biggest benefit that are provided by micro-finance activities.
 It is basically offering to people who are living below wealth line as they do not have any
way in forms of funding (Ganle, Afriyie and Segbefia, 2015). It boost easy and small
savings among poor people. As it promote to build up finances step by step.
 Moreover, it help borrower to repay loan on promptly basis as the repayment tenure is
for short duration of time. If an applicant is able to pay back its loan on time then an
individual can receive their next loan easily (Schicks, 2014). As repetition debt is always
offering to individual who has already acquire and display their capableness it on time.
 Generally, micro financing institution have simple and speedy procedure of loan
application with very low interest rate. It aim is to develop financial sustainability among
economic downtrodden people (Lal, Uphoff and Hansen, 2016).
 Its one of the biggest advantages is that it help in developing huge number of jobs as it
change ignorant group can involved in several source of employment alternatively of
unexpended unemployment.
 Eventually, it are providing financial transparency by offerings debt to individual without
any hidden cost, fee or any short of charges in it. Its main focus is to hold financial
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services in order to easy, easily approachable, economical and supple in nature (Hopper,
Lassou and Soobaroyen, 2017). Apart from this this they include cash service facilities
with minimal zero deposit and micro insurance.
Thus, micro-finance play's an equivalent role in developing an individual dream in an
effective manner. It help in fulfilling needs of uncovered section of society so that they can be
financially stable. At the same time their should be proper control and regulation over the
workings of micro finance company.
Models
Association or group model: An association is formed in poor target community in order
top offer micro-financing such as micro savings, micro credit and micro insurance etc.. It is
basically composed of young youth which can make assistance construction for micro enterprise
and other business supported issues (Hsu, 2014). As in some state an organisation it can be a
legitimate body that has definite benefit such as aggregation of fees, insurance, tax breaks and
other protective measure (Karnani, 2016). It usually involves groups individual who are the basic
unit of operation in this process. Such group delegates entire unit processing for the entire
financing services such as savings, getting loans, repayment of loan and record keeping which
are managed by them.
Community banking model: Community banking model essentially treat whole
community as one unit which is established in semi formal or formal institution through micro
financing. Such institution are normally defined by extended assistance of NGOs and some other
organisation. This saving institution have saving components and other income generating
groups which are included in their structure (Kwai and Urassa, 2015). Herein, they typically
belong of 25 to 30 low income individual who are effort to better their lives through self
occupation activities. It differs from solidarity group that assume eventual graduation of their
borrowers from lending institution. Its primary duty is to provide or develop internal financial
management capacity of the group in order to create mini bank, independent of lending
institution owned and managed entirely in order to help poor and needy ones.
Cooperative model: Cooperative model are very much like association and community
Banks that expect their own ownership structure (Shu and Oney, 2014). It is an autonomous
association of person that belong to same legal or professional community that are united
voluntarily to meet out economic, social and culture needs and aspiration through a jointly
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owned and democratically elect officer among themselves in order to monitor all the
administration of the cooperative. Creditworthiness and loan security are a function of
cooperative membership within each members savings and peer pressure that are assumed to be
the key factors of this model.
The Grameen model: Grameen model is supported on the conception of joint liability. It
is one of the most accepted model that prevents micro-financing delivery model in the world
today. This model is highly focused on standardization and discipline in order to become
successful in baking services foe the poor as well as providing poverty alleviation programmes
(Boateng and Boateng, 2014). It main objectives is to extent facilities to poor and needy ones so
that they can become financial stable, eliminating problems of poor people so that they can
develop their dreams or else helping them to develop them financially. Moreover, it gives high
priority in building social capital through the formation of groups and centres by developing
leadership qualities and undertaking process of discussion among borrowers. It basically,
emphasis on protection of environment and children education and provides scholarship and
student loan for higher education (Ghalib, Malki and Imai, 2015). Thus, the above mention are
some of the models of micro-financing that help an individual to attain financial services in an
attractive manner.
2.6 Conclusion
As per the above specified literature review, it can be depicted that development of
micro-finance institutions help to improve the living standard of poor people in Bangladesh.
Grameen bank provide proper services and facilities to the needy and poor individuals. This is
important for giving sufficient funds and finance to the country people who are need such for
living their life in better manner (Arrivillaga and Salcedo, 2014). There are various types of
micro-finance which help them in managing and maintaining all funds effectively. It includes
Joint Liability Group (JLG), Self Help Group (SHG) and Rural cooperatives are different types
of micro finance institutions that are analysing and examining importance of microfinance.
CHAPTER 3: RESEARCH METHODOLOGY
Research methodology is the process and instrument that can be utilized for choice,
characteristic, processes, examine the entire collection and information of particular theme. In
this part, they permit scholar to examine and measure survey dependability and credibility in
16

amended way. The research is carry out for inform, describing and anticipate entire work
procedure effectively. It is refer as the study of method in which they are gain appropriate skills
and knowledge. This is one of the most important part of research project because it is required
factor (Adnan and Ajija, 2015). In this, all the leading issues and trouble are accompanying to
research study which can be form in better manner. It is required for an researcher is to do main
activities and purpose in granted period of time so they can adopt wanted goals and targets.
Along with this, an investigator has been investigate their report in order to formulate
accurate approach of research and information must be explore for collecting and gathering
appropriate data and information. There are various parts that includes research approach,
research philosophy and data collection. This will help researcher in order to conduct accurate
analysis of findings that determine accurate results or outcomes. An investigator are setting
correct guidelines which assist in carry out all business operations and its functions.
3.1 Research design
It is defined as a framework of techniques and methods which are selected by an
investigator to integrate different elements of research in logical manner so that investigation
problems is efficiently managed and handled. This will provide insight about “how” to conduct
research by using specific methodology. The design of an investigation topic includes
experimental, survey, semi experimental and review and its sub type involves research problem,
descriptive case study, experimental design. In descriptive research design, a researcher is solely
interested in explaining the situation under the study (Evelyn and Osifo, 2018). This is theory
based research design which is developed by analysing, presenting and collecting appropriate
data. On the other hand, experimental research design, it is utilised to set up relation between
reason and consequence of condition. This is a causal research design in which the outcome is
grounds by independent changeable such as price on dependent variable. In this existing
research, descriptive method is used because this will assist in gathering and collecting accurate
data for completion of report.
3.2 Data collection methods
The main motive of this investigation is to conduct in depth interview for analysing and
examining various respondents views and opinions. In depth interviews are personal and
unstructured interviews which main purpose is to recognise participants emotions, opinions and
feelings regarding specific research subject (Tu, Viet and Loi, 2015). Data can be divided by
17

various methods and strategies which can be used for gathering information in better manner.
There are two fundamental sort of collection in order assemble data which is important source
and it can be described as follows:
Primary data – In this, it is that method which can be useful in social occasion and gather
actual data effectively. There are different methods and sources which assist in collecting
accurate statistical data points among various components such as observation, interview,
contemplate, recognition and many more. Such methods helps in acquiring and collecting
accurate data at the time of developing report. It is the method which assist in collecting data by
investigator from first hand methods by using different techniques such as examination,
interrogation, experimentation. Along with this, it is accumulated and collected with
investigation project in mind, directly from primary sources. In this, new data and information
has been collected specially for the purpose and directly from another person (Hutton and
Chase,2016). Primary data is based on goal of research and gain depth knowledge of
information.
Secondary data – It is the process where data is collected by someone who is someone
other than the user. There are various sources of secondary data for social science which includes
censuses, information collected by government department, organisational records and data
which was originally gathered for other research purpose. It can be used for assembling and
collecting required data in order to acquire high income and profit in effective way. There are
various tools and techniques that can be beneficial for gaining and getting accurate facts and
figures that includes books, journals, magazines, publications and many more. Along with this,
secondary data is information that are already available somewhere, it includes journals, articles
and internet. Secondary data is the method which are collected and gathered by anyone other
while completing accurate research report (Chliova, Brinckmann and Rosenbusch, 2015). This
information is impure as statistical operations which may have been performed on them already.
These are the data which are gathered and collected from secondary sources in which data has
been collected by researcher and used by other agency. Secondary data is define as public
information which has been collected and gathered by others and it is typically free and
inexpensive to obtain and it can act as a strong foundation to any type of research report.
In the current research, secondary method of research is utilised for gathering and
collecting proper collection in order to accomplished the study.
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3.3 Data collection Instruments
In this portion, researcher want to access straight information and data of investigation
project so that they can easy execute method and performing in order to gain benefits in better
manner. Along with this, there are different ways through which an investigation can conduct in
effective manner such as qualitative and quantitative method of research.
Qualitative research - In qualitative research, data has been concentrated and
accumulated by formulating usage of qualitative method and it is primarily concentrate on keep
its quality and customer perception regarding firm products and facilities. Qualitative research is
considered as primarily exploratory research (Gloukoviezoff, 2016). This is used for gaining and
acquiring an understanding of outlining reasons, expectations, opinions and motivations. This
will provide insights into problem and it helps in developing ideas for quantitative method of
research effectively. Along with this, qualitative research method is used to uncover the trends in
opinions and thoughts which is deeper into issues or problems. Qualitative data collection
method vary using unstructured and semi structured techniques in better manner. In this section,
there are various sources of qualitative research which includes focus group, individual
interviews, observations and participations.
Quantitative research - Another is quantitative research which assist in collecting and
gathering correct data and information with the assistance of authentic graphs and charts so that
researcher mainly concentrate on understanding and evaluating qualitative factors of particular
theme. It is that method of research which is used to quantify the problem by way of generating
numerical data and such data can be transformed into unstable statistics. Along with this, it is
used to determine and evaluate attitude, behaviour, opinion and other defined variables and
generalise results from larger sample population (Pedrini and et. al., 2016). Quantitative research
use important data which assist in developing facts and figures and uncover pattern in an
investigation. Quantitative data collection method are more structured than qualitative data
collection method. Quantitative method involves surveys, interviews, case studies, websites,
online polls and systematic observations, etc.
In this, current report is used qualitative method of research because it will help in
assembling and gathering accurate collection and info.
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3.4 Sampling
The method of purposive sampling was utilized in order to create and develop sample of
an investigation under discourse. This method is mainly related to the aggregation of on
probability sample techniques, sample associates are chosen on the ground of their ability,
knowledge, relationship and specialist regarding investigation subject. In the actual survey,
respondents who are chosen had particular relation with the development under investigation,
adequate and straight work experience in the sector of banking, active involvement in various
banking initiatives and functions (Beisland and Mersland, 2017). The sample size of the
respondents are 60 respondents who are given their views and opinions regarding Grameen bank
services or facilities.
3.5 Research Approach
It is the procedure and plan which consist with steps with advanced assumption and
prediction to explained techniques of information accumulation, representation and investigation.
This is supported on enquiry quality that aid in resolution of leading issues and problems which
are being identified. Research approach is the critical section of technological study which help
in examine and analyse entire area. The research approach which has been followed for the
motive of this investigation is inductive. As per this approach, an investigator start with specific
observation, that can be used to develop generalised theories and conclusions which are drawn
from the research (Mazumder and Lu, 2015). The main reason for acquiring the inductive
approach, this will taken into account the context where research activity is active while it is one
of the most appropriate for small samples which will make qualitative data and information.
However, the major weakness of inductive approach is that this will develop common theories
and conclusions which are supported on small number of observations, thereby the dependability
of research outcome that are being under interrogation.
3.6 Research Philosophy
Research philosophy is the value or beliefs that can be used for gathering and collecting
appropriate data while completing the project. This section shown various types of beliefs and
patterns which are followed by an investigators and the main responsibility is to select correct
philosophy for an organisation in order to achieve with desired results and outcomes. In addition
to this, there are various kind of investigation philosophy that includes positivism, realism,
pragmatism, interpretive and subjectivism. In this, positivism believe that reality is stable which
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can be described from an objective perception without interfering with phenomenon being
studied. This should be allocated and repeatable. In this, an investigator develop usage of science
and maths models which can be helpful in acquiring accurate facts and figures (Abbas and
Shirazi, 2015). On the other hand, interpretivism consist with subjective interpretation and
intervention is reality that should be understand. Such type of philosophy provides main
concentration on data quality which will collected and gathered in effective way. In pragmatism,
researcher adopt the conception which are foremost appropriate for performing promote activity.
There are different ways through which they can interpret data and information accurately.
Realism philosophy refer as an thought of independence which are related to human mind. This
type of philosophy is supported on anticipated and forecasting of scientific approach which assist
in formulating and developing knowledge. At last, subjectivism is the philosophy that are related
with interpersonal and it mention as an respective education, representation and interpretivism.
In the current research, positivism research philosophy is beneficial for assembling and
collecting faithful information while finishing this report.
3.7 Research method
For fulfilling and satisfying the objectives of research report, a qualitative method was
held. The primary symptomatic of qualitative investigation is that it is one of the suitable tool for
small samples when its outcomes are not measurable and quantitative in nature. The main
advantage of this, it will represent its basic difference with quantitative research which offers a
complete explanation and analysis of research subject without confining the scope of
investigation and attitude of its participations (Rasheed, 2015). However, the main benefit of
qualitative research is mainly based on skills and abilities of an investigator. Along with this, its
outcome may be detected as dependable because they are generally come from investigator
individualised judgement and understand. It is more suitable and appropriate for small sampling
which is dangerous for the outcome of qualitative investigation to be sensed as reflective thought
of broad group.
3.8 Data analysis
It is analysed as an important part of research procedure in which investigation is
required for analysing and examining needs for collecting appropriate data in the context of
identify particular aims and objectives. In this part, information is related to find out details and
there are different types of graphs and charts which can be used for the same. Data will be
21

examined by using random sampling method and the size of sample is 60 respondents (Pawar,
2016). Along with this, it will assist in recognising appropriate facts and figures while
completion of research report. Participants are those individuals who are invited to participate in
specific study and it will taken part in the study. It is used in both qualitative and quantitative
method of investigation.
This is the process of consistently applying statistical and logical techniques and methods
in order to describe and elaborate the information of the investigation in amended way. This is
the way of drawing inductive interference from data and it is different from signal. In this, it can
be seen it is critical analysing and interpreting the figures and numbers in order to find out
accurate results or outcomes of an investigation. Data analysis is define as procedure which
associated with surfacing meaning and understanding from various data sets which can be
gathered and collected information at the time of research project (Ganle, Afriyie and Segbefia,
2015). The embedded nature of action research in organisational and social settings are easily
determined effectively. It is the critical part of any research and it is summarise the data which
has been collected in better manner. It involves interpretation of data through the usage of
analytical and logical reasoning to determine patterns, evaluating trends and relationship. Data
analysis make it easier for user in order to sort with an organisation data which assist in identify
trends, patterns, relationship, correlation which are difficult for measure in each manner.
3.9 Techniques and Procedures, and Research Instruments
In this section, questionnaire define as an essential and beneficial instrument of an
investigation which are used by researcher in order to collect and gather information from
respondents regarding specific topic (Lal, Uphoff and Hansen, 2016). This method assist
researcher is to save their time and gather appropriate data which will assist in finish each and
every activity of study in systematic manner.
3.10 Reliability
It is the way of assessing the quality of measuring procedure which can be used for
collecting data and information in the dissertation. It refer as the degree to which research
method produces stable and consistent results. This will check the efficiency of research and
describe its importance in the investigation.
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3.11 Validity
Validity is recognised as an accurate procedure which has been used by an investigator in
order to answer to a question. Along with this, reliability is similar as validity so this will
introduce the quality of measurement process which gives repeatability and relevancy (Karnani,
2016). For this, questionnaire is best appropriate example of research validity and reliability
because such device and tools provide authentic information which are associated to the topic
from selected sample size.
3.12 Ethical consideration
In this section, research onion involves there are various factors such as no harm to
respondents, lack of informed consent, voluntary participation in the study, invasion of privacy,
confidentiality of data and its personal information. It is important for an investigator is to ask
easy and valid questions to the respondents regarding specific topic. Therefore, this will assist in
easily performing whole activities and functions of an investigation. It is common consideration
which undertaken for an association in order to explore in overall areas. In addition to this, it can
be analysed that actual rules and regulations that can be recognised in terms of right or wrong in
effective manner (Arrivillaga and Salcedo, 2014). This can be analysed that it is an essential part
that can be used for securing and safety of different criteria on specialist that can be gathered and
collected in proper manner. They have to made accurate decisions for selecting the right or
wrong and it is also show with person facts and figures from various respondents or participants.
There are various types or kinds of moral qualities that are required for investigator in order to
sort the particular research work in better manner. In addition to this, it is necessary to acclimate
that it is fundamental framework which aligning the networks resistance and lawful legislative
issues.
3.13 Limitations
In this, there are various limitation such as time and cost which directly impact on an
investigator at the time of completing all research activities of study in systematic manner. The
research topic is wide and an investigator required to complete this in given time period.
Therefore, for finish this research, they need to give proper time, cost and funds.
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3.14 Time frame
In this area, investigation may be determined as time constraints and research can be
known as cross sectional study and it may be taken long time period and series of short time
effectively. This is used for drawing and framing the time according to the schedule. Along with
this, there are two types of time frame such as cross sectional and longitudinal. In this, cross
sectional is that method which is the type of observational study and it will help in analysing and
evaluating data from large number of population and representative in specific time period
(Ghalib, Malki and Imai, 2015). On the other hand, longitudinal is an observational research
where data are collected and gathered for similar subject and it is repeatedly in given time
period. The assignment is fully based on cross sectional time frame that can be used for
formulating appropriate time period in which researcher can easily complete research project.
CHAPTER 4: RESULTS AND DISCUSSION
In this section, secondary research is used which assist in analysing and examining
different views and opinion of authors regarding specific topic. It refer as the data which has
been collected and gathered by someone who is someone other than user. There are various
sources of secondary method of data collection such as books, magazines, journals and so more.
In this, secondary research method is used for analysing various authors and scholars view points
in order to completing the research project (Boateng and Boateng, 2014). Along with this, it will
assist gathering and collecting required functions and activities that can be used for maintaining
and managing business functions and operations in better manner.
4.1 Purpose of micro finance Purpose of micro finance institution
Micro finance is basically a provision or a broad range of financial services such as
deposits, loans, payment services, money transfer etc.. It provide services to poor and low
income households it may be in any form such as formal, semiformal or informal resources such
as money lenders or rural banks and cooperatives.
As per the views Leon Teebom, in today's context micro financing are mix of
governments banks, non governmental non profit organisation and large business and lenders
seeking several financial needs of million of consumer at world wide. The purpose of micro
financing is to supply financial work to group who are specifically excluded from conventional
finance transmission because of their low, improper and unforeseeable finance. It help poor and
24

needy people and enterprises to increase access to low-priced financial services in order to aid
them in create action. It usually collect accession direct savings that is render for household
demand or defend against themselves against the risk of daily such as health issues, death or
natural disaster. Micro financing is originally associated with micro credit, small loans ranging
form to lend money to small business or tradesman with no collateral security (Shu and Oney,
2014). The first micro credit system was developed by Bangladeshi economist in 1976. it
developed this business in the name that was the banker of poor. Before the bank was generally
concentrated only on lending to middle and upper clients as well as to upper class of people too.
It become so popular that it leads open similar micro financing all over the world. In other words
it can defined as committee paid homage “Yunus” to needy ones as concept of creating
economic development opportunity in ground from. Here as the core meaning of micro
financing is that it refers to offering of services of home and other necessary loans to lone ones
with low interest rate as well as with no collateral security for it. But, now a days it has
emerged with greater range of financial services when Yunus established the concept.
Moreover, its purpose of developing individual in an effective manner such as, be viable
with institution developing sustainable communities. They are adopting mobilize resources in
order to provide financial services to the poor special to women for viable productivity income
generation enterprise as enabling them to reduce their poverty. It help to create opportunities for
self employment for the underprivileged to poor so that they can utilise the available resources
that contribute to the employment and income generation in rural areas. Moreover, they are the
pivotal overs-ease organisation in many country which makes an individual to enter into their
own small business venture (Kwai and Urassa, 2015). It is like a small business with challenges
and capital needs comforting in expanding business of an individual with added responsibility or
serving economically at world wide. Herein, many micro financing institution are creditworthy
and well run proven records of success in an attractive manner in competitive marketplace.
Apart from this, it plays an equivalent role that help in struggling individuals, committees
in order to gain success to financial services that hopefully help them to increase their standard
of living as well as help to raise poverty line of a particular country. For such organisation
profit was never goal of such companies they are usually non-profit or governmental institution
that sought to help poor.
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4.2 Development of micro financing institution
Micro finance institution are referred as non bank financial institution that are growing
rapidly in today's context. It has been evolving very large scope of business special in villages
and district which h are involved in role of financial program. It have different character from
other financial institution which can bridge problems of micro business in order to access capital
needs in business development. Apart from this they are providing consultancy for the purpose
of business development for community empowerment. It help in implementation of economic
development in addition in amening to increase out national income at most accelerating job
growth and reduction of unemployment rate in order to solve out problem of poverty. This are
one of the most influential sector in development of national economy that provide broader
economic services to the community. Moreover, in order improve empowerment many micro
companies are helping to grow and develop by many non financial institution that usually
conduct business development with role of financial intermediaries (Kwai and Urassa, 2015).
Their effort is to provide financial services especially saving, loans or financing management and
other financial services intended for poor and low income families who do not access to
commercial banks. In such context they have developed themselves with the support of RBI
such as they have been seeking bills in order to provide statutory frameworks to regulate and
develop micro financing industry. Herein, RBI are settings upper limit on the lending rate and
margins of micro financing institution. As the bills are provided by creation of councils and
committees at central, state and at district level in order to monitor the over all micro financing
services at wider context area. The bills provided by the RBI are safeguards against any kind of
misuses of market dominance.
Apart for this, micro financing institution have faced may problem such as cost of
outreach which indicates that unbanked population of the world that are servicing small loans
amount specially in remote areas of planet. Moreover, it can be dangerous unprofitable with
high rates of process automation and mobile delivery (Porter and Kramer, 2019). They were also
lacking behind in scalability such as they were suffering from profitably and lack of
performance in the marketplace. Due to high growth of self help groups as in this process many
government departments were involved in promoting groups align with diminishing skills sets as
well change grouping of dynamics. Furthermore, their were certain geographic factors that
created difficulties in formation of micro financing in order to communicate with their clients
26

which ultimately created problem in growth and expansion of an organisation. It also affected
with diverse business model as they were supporting in very wide range and features that were
lending activities were difficult that occur huge amount of cost and efforts. It also involved in
high cost as it was one of the biggest challenges for micro finance institution. As the volume of
transaction is very small where as fixed cost as its cost transaction were very high (Islam,
2016). They have also faced problems regarding securities and challenges as they were not able
to provide tangible security that created extremely difficult for institution that are being offered
by any baking services. Generally, making provision for upfront investment was not possible for
the micro financing institution which have limits their capability in purchasing world class
banking solution. It help them to fulfil their requirements that help them in developing. Though
micro financing institution have shown a impressive growth that has been created instrumental in
case of non financial inclusion. Initially, they are still working towards more higher achievement
at wider context area.
Micro finance has undergone in recent years, in those days their were positive impact
that effects micro finance that have been exaggerated with rapid expansion of micro credit and
its limits benefits in reducing extreme benefits. Such as many borrowers were allowed to take
several advantages of multiple loans with sub preview lending with low interest rate as this was
evidence of coercive collection practices by some of lender in many countries. Herein, credit
help many individual or group of people in difficult times as sustainable savings was a
framework which was more important in long process of money lending (Etuk, Etuk and
Michael, 2014). It also facilitated with direct cash lending that have effected micro financing
loans to entrepreneur in setting up their own venture so that they can earn their livelihood as well
as provide employment to the needy ones. In this way they have created dual benefit such as by
fulling need and creating job opportunities for the unemployed people within a society which
leads to have economic development in an attractive manner. Though their were certain risk
involved in it such as poorer countries were not such vulnerable to external sources of findings.
As they were associated with the risk of natural disaster, misshapenness . In this manner focus
was not appropriately done towards micro finance rather than micro credit. Though it was not a
miracle in nature but it allow to have households loans in order to borrow and help out in funding
many ventures and creating jobs foe unemployed people within society or environment.
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4.3 Role of micro finance in improving living standard of people
In toady's context micro financing have undertaken forces that are basically focusing on
improving standards of living of needy people as it main aim is to reduce the poverty level. It
usually involves the provisional service that are targetting poor and needy, low income group
people in savings and insurance. This sector is involved towards needy one that are depended
on their small scale business. Micro financing help in developing an individual by proving them
financial help. It basically help farm households to meet up the basic needs and protect them
against risk. This financing factor is associated in improving financial facilities to the needs and
poor ones so that they can help in developing their living standards that leads to create welfare
within the society and economy as a whole (Dhaoui, 2015). Thus, its main focus was to develop
the empowerment of women by supporting them in economic participation. In this way they
want to prevail gender equality among the society as well as economy.
The main role of microfinance is to analyse the impact of this in order to improve living
standard of people, empowerment and poverty reduction among poor people. In this,
microfinance is determined as one of the effective mechanism through which they can make
improvement in health, legal rights, living standard of people which are accurate concern for the
poor. Microfinance is the form of financial development which are mainly concerned for
reducing poverty and through which living standard of people is continuously improved. It can
be identified that poor people are able to coming out from poverty with dignity and they can
improve their living standard in the country (Khatun and Hasan, 2015). There are various nations
which have succeeded in order to generate dynamic and productive self employment through
microfinance programs.
Bangladesh is one of the developing countries in the world. It is that country which have
poor people financial market. In such type of market, introduction of the microcredit was a
financial innovation. It can be analysed that poor people do not have capacity to start any income
generating activities due to lack of financial capital and money. They have limited access to
formal financial institutions because inability is to fulfil their collateral requirement (Boateng,
Boateng and Bampoe, 2015). The clients of micro credit are generally poor and low income
people. Poor people use finance which are helpful in dealing and managing all system which are
remove all barriers in better manner. Grameen bank give their contribution in make improvement
in living standard of people. The bank successfully reached with their target group with credit
28

and ensured about both productive utilisation of loans and recover it in given time period. The
bank are help poor people in order to increasing the living standard of more than 90% of the
respondents. Grameen bank assist in reducing poverty and increasing living standard of people
that can helpful in generating income and revenue.
In order words, poverty is the situation where an individual can not fulfil desired human
needs and demand. In current time period, there are large number of poor people who have gain
benefit from microfinance activities and functions such as micro credit, micro saving and micro
insurance. For devising such financial services is the central instrument for evolution of
numerous processing nations (Hulme and Maitrot, 2014). It can be analysed that miserable as
well as lower income grouping are facing leading issue and problem in accession approval.
Bangladesh is one of the processing nation with advanced people spacing in position of amount
of collection and land area. For last years, Bangladesh economy can not reach and accomplish a
macro economic improvement and powerful path evidence of handling poverty by providing
them sufficient amount of funds. The standard of living in many developing countries such as
Bangladesh where most of the people are below poverty line. The microcredit program of
Grameen bank (GB) in Bangladesh have to be emerged as a strategy which assist in increasing
standard of living and reducing poverty. Along with this, they are trying to eliminate poverty and
unemployment and energetic poor people who need to engage in economic activities, the
institution not only provide loan to them but also monitor and managed properly. The main
motive of this study is to analyse the impact of Grameen bank microcredit on standard of living
of rural women in examination area whom they have already involved in their loan.
Livelihood is usually compromise of activities that are required for means of living. It
can be defined as activities of assets that help in accessing in living gained livelihood by a
particular individual or households. Generally, it means support of something that provide
facilities that provide income through various activities that people know how to undertake it in
earning income in present as well as future context of time (Quinones and Remenyi, 2014).
Moreover, a sustainable livelihood help an individual or group of people in recover their loss if
it has been occurred by them. It also helps in maintaining capabilities assets for bothy future and
current needs with the help of natural bases in an attractive manner. As capital play's an essential
role in determining a household facilities in order to well being that basically includes naturally,
29

physical, financial, human resource management and their capital or raising fund actives through
marketplace.
As per the views of Kapoor (2014) living standards of people are said to be favourable
when there is high consumption, high education level, proper housing condition. It also includes
availability of goods and services in an appropriate manner so that a person can have a good
standard of livings. Herein, micro financing have indicating that it has raised the standard of
livings through their investment plan, providing findings in whenever they need for it. As
improvement living standards are necessary to accessed as bit help out in changing living
condition of a particular respondents with the help of loan facilities. Eventually, it has been help
in developing business by accessing the basic need of an individuals such as providing food,
cloth shelter and education which are the basic needs for having quality of standard of livings.
Micro financing are having greater standard of living that helps in achieving of living in
an effective manner. Such as it help in encouraging standard of living with greater sustainability
and analysing market that has been transformed into money markets in making situation in
attractive manner. Eventually, savings and credit are two main factor that plays a vital role for
economic empowerment of underprivileged with in society (Akotey and Adjasi, 2016). As credit
provision usually encourages the development of sound financial infrastructure as well as
growth of local community in which they are operating in an effective manner. Additionally, it
help in creating employment opportunities for jobless through self employment as they can grow
through this process in an attractive manner. Thus, micro financing is help an individual in
developing standard of live in an effective manner.
4.4 Strategies used by Grameen Bank in reducing poverty
As per the view of Hari Srinivas, Grameen bank think that lack of access to credit is the
biggest constraint for the rural and needy people. The poor people are provided credit at
reasonable terms so this will increasing their income. Grameen bank target and mobilise the poor
and create social and financial situations so that they can receive credit in order to identifying a
source of self employment in familiar rural non farm activities and functions. Grameen bank
offer guidelines to members for code of conduct and activities which main aim is to improving
their social and financial situations. It will provide training to women in maternal health,
nutrition and childcare which generate higher demand for basic health care services and
facilities. Grameen bank has became a national institution which provide credit to the rural poor
30

people in Bangladesh. There are various strategies which can be used by Grameen bank in order
to reduce poverty that are described as under: Provide job opportunities – Grameen bank is the type of baking service which offer loans
and funds to the people in order to make improvement in their living standard. It is that
strategy which assist in reducing poverty and assist in developing their income and
revenue level. Along with this, Grameen bank offer jobs which are best suitable to the
poor people so they are work hard for make improvement in their life. Grameen bank is
the financial service provider bank which help them in reaching with poor people who are
not fulfil their common services and facilities properly (Akotey and Adjasi, 2016). For
reduction in poverty level, they need to create huge job opportunities for the country poor
and needy people. Provide loans – Grameen bank is one of the famous bank which assist in providing loans
and funds to poor people in order to make them able to survive their life in better manner.
They are offer loans and finance to middle income level people which are deemed
creditworthy. Such loans are profitable and it does not work to increasing its income but
main aim is to faster global socio economic development. They are provide low interest
loans and grants to the poor people in order to gain maximum profitability and income
level. Along with this, they need to provide loans and funds to the poor people where
they can easily gain attention of large number of needy and poor individuals. Bank loans
are the essential factor which are helpful in offering required amount of funds to the poor
people in order to became independent especially women. Apart from this, bank play an
important role in economy which offer a service for people to save their amount. They
are providing financial services and facilities to the poor and needy people in order to
expand their investment of capital (Akotey and Adjasi, 2016). Such loans and business
investment are essential for enabling the growth of country as well as economy. In order
to began offering credit to poor women in the village of Bangladesh, so that they can
easily launch income generating projects which assist themselves and their families. Encourage people to became entrepreneur – For reduction in poverty level, Grameen
bank can offer required funds and finance to the poor people especially for women. By
providing such loan, they are encourage poor and needy individuals to being an
entrepreneur who are start their business. Along with this, such banks are motivate and
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encourage women to make them independent and they are able to begin new business for
gaining maximum profit and income (Najmi, Bashir and Zia, 2015). This will assist in
reducing maximum level of poverty within the nation. They are analyse and examine
people skills and knowledge and motivate to lead them in reaching with desired goals and
objectives. It is required for Grameen bank is to offer necessary income which are
sufficient to start the business at market place. An individual who are able to handle and
manage all business functions and activities are take loan from banks at reasonable
interest rate.
 Develop new schemes and plans – It is required for Grameen bank is to develop new
schemes and plans for the poor people who are willing to start their business in reducing
their poverty. So they need to offer them required loans and financial services in order to
give them adequate amount of capital for developing economy and growth rate (Jose and
Chacko, 2017). Grameen bank are offer necessary services and facilities to the needy
people for make improvement in their standard of living. In addition to this, microfinance
is considered as effective tool in order to reduce poverty while bearing in mind the
limitations of strategy in tackling an entrenched global issues.
From the above secondary method analysis, it can be analysed that microfinance is the
type of banking service which help people in offering required services and facilities in better
manner. Microfinance play an important role in gaining attention of large number of poor and
needy people toward such financial services in order to reach with desired goals and targets.
Micro finance is basically a provision or a broad range of financial services such as deposits,
loans, payment services, money transfer etc..Micro financing is originally associated with micro
credit, small loans ranging form to lend money to small business or tradesman with no
collateral security (Bondinuba and et. al., 2016). Moreover, its purpose of developing individual
in an effective manner such as, be viable with institution developing sustainable communities. It
have different character from other financial institution which can bridge problems of micro
business in order to access capital needs in business development.
Herein, credit help many individual or group of people in difficult times as sustainable
savings was a framework which was more important in long process of money lending. Thus, its
main focus was to develop the empowerment of women by supporting them in economic
participation. In this way they want to prevail gender equality among the society as well as
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economy. Grameen bank target and mobilise the poor and create social and financial situations
so that they can receive credit in order to identifying a source of self employment in familiar
rural non farm activities and functions. Along with this, such banks are motivate and encourage
women to make them independent and they are able to begin new business for gaining maximum
profit and income.
CHAPTER 5: CONCLUSION AND RECOMMENDATION
5.1 Conclusion
From the above described report, it can be analysed that Micro finance is the concept of
financial facilities targeted at respective and small enterprise who are need accession to
customary finance and related to facilities. It includes micro credit which gain attention of large
number of poor people towards Grameen bank and reach with desired goals. There are various
micro finance which are provide loans on increasing entrepreneurs income and innovation. It is
associated with accurate business skills, technologies, information to be offered by micro finance
with careful screening and monitoring in make sure about effective utilitarian of loan capital.
Grameen Bank plays a vital role in providing loan to small workers or a needy person who get
something of the ground to maintain standard of life. In a nutshell, Grameen Bank facilitates
micro finance to an individual or a group which help in the beginning of ground level of work.
Microfinance define as delivering financial services to the low level income people,
specially in relation to poor and needy individuals in order to develop regions all over the world.
It can be analysed as one of the most accomplished and well known microfinance institutions is
Grameen bank. They are provide required services and facilities to the country people who are
willing to acquired. It is the kind of formal and informal group which consist with small
entrepreneurs along with same type of socio economic backgrounds. Microfinance is the
condition which has wide scope of financial services such as debt, deposits, cost facilities,
money transfers and security to poor and needy people. The Grameen bank is a microfinance
organisation and community development bank which are make small loans to the needy people
to the impoverished without required collateral. This is one of the most important part of
research project because it is required factor. In this, all the prime issues and problems are
accompanying to investigation study which can be form in improved way. It is required for an
researcher is to conduct main action and purpose in given period of time so they can adopt
33

desired goals and targets. It is defined as a framework of techniques and methods which are
selected by an investigator to integrate different elements of research in logical manner so that
investigation problems is efficiently managed and handled. his method is mainly related to the
concept of on probability sample techniques, sample members are chosen on the ground of their
ability, knowledge, relationship and specialist regarding research subject. Research philosophy is
the value or beliefs that can be used for gathering and collecting appropriate data while
completing the project.
Micro financing is characterized as procedure of supply loan, credit entry services and
other essential business services and merchandise to individual who are highly miserable to get
access on regular sources of finance such as banks and other financial institution. Generally,
micro financing institution have simple and speedy procedure of loan application with very low
interest rate. It aim is to develop financial sustainability among economic downtrodden people.
Furthermore, it refers to micro credit to banking or financial service that are offering by many
banks or other financial organisation to respective person who generally consist to low income
group or underclass area of social group. Its main focus is to hold financial services in order to
simplified, easily accessible, economical and flexible in nature. Apart from this this they include
cash service facilities with minimal zero deposit and micro insurance. Moreover, micro
financing are having greater standard of living that helps in achieving of living in an effective
manner. Such as it help in encouraging standard of living with greater sustainability and
analysing market that has been transformed into money markets in making situation in attractive
manner.
It can be concluded that micro finance is the type of banking services which assist in
providing variety of services and facilities to the people. It is an effective tool which help in
reducing poverty in most emerging and developing nations. This enables the poor to engage with
self employment and income generating activities or functions in order to became financially
independent and better able to break out the poverty. Along with this, it is the key strategy where
it will help people to remove poverty level and became financially independent that assist them
in becoming more resilient and this is capable to provide their families in times of economic
complexities in better manner. In Bangladesh, micro finance is the program which provide small
scale financial services to low income individuals. Loans are designed and developed in foster
sustainable economic empowerment and capacity to developing people in different areas. It is
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also described that impact of microfinance is relevant to poverty alleviation programme and it is
essential to identify the range of factors which contribute to creating poverty and reaching with
sustainable solution of poverty. It can be analysed that microfinance institutions is grow in
different country in all over the world, it will continues over whether such programs are gain
benefit to the poor. This will emphasise the need for innovative ways which help in providing
financial services to poor people. It is seen that when Bangladesh's micro finance sector was
established in the 1970s so its main aim and goal is to reduce rural poverty by providing micro
credit loans for non corporations activities that includes trading, increasing livestock and poultry.
Such loans and funds are funded by government of Bangladesh and bilateral donors through
group based savings and lending programs.
Micro financing basically emphases on helping needy and poor people in order to have
wider ranges of financial services. This needs are the evidences that are made by many financial
service in for of both formal and informal; structure that aims in provider welfare for the society
and economy as a whole. They are providing services to the solely needy people for income
generation with various financial services as they are understanding the needs and mins in
removing poverty at extrema level. Apart from this they were many informal financial services
which are responsible for saving of poor people so that they can demonstrate their ability and
willingness of poor people to earn their livelihood. It provide services to poor and low income
households it may be in any form such as formal, semiformal or informal resources such as
money lenders or rural banks and cooperatives.
Moreover, there are many micro financing institution are creditworthy who are usually
running in competitive marketplace to support the needs of poor and needy ones. It is creating
out dual benefit both for the society as well as individual such a it is providing funds to an
individual in developing their won ventures as well as creating opportunities for underemployed
with the society and environment. Apart from this, it plays an equivalent role that help in
struggling individuals, committees in order to gain success to financial services that hopefully
help them to increase their standard of living as well as help to raise poverty line of a particular
country. Further more they were supported by RBI such as they have been seeking bills in
order to provide statutory frameworks to regulate and develop micro financing industry. Thus,
micro finance has undergone in recent years, in those days their were positive impact that effects
35

micro finance that have been exaggerated with rapid expansion of micro credit and its limits
benefits in reducing extreme benefits.
5.2 Recommendation
On the basis of above described report, it can be recommended that microfinance is the
critical element of poverty reduction strategy which can help in developing countries.
Microfinance is identified as a improvement instrument for property rural evolution by reducing
poverty and render empowerment of the poor which main focus on rural women. They can offer
various services and facilities which assist in improving living standard of population in
Bangladesh. Microfinance institutions are required to expend in acquiring to knowing this new
target grouping as well as employ particular tailored formulation. This will want to conduct
market research and various accessible information to acquire their actual function and use direct
observation. They can develop and made new plans and schemes which are related to poor
people who are not live their life in better manner. For this, they can easily survive their lives
without any issues and problems. MFIs can manage and maintain risk better through they face
issues and challenges where large samples are not available to construct model. Microfinance
can provide specific training for loans to the manager which can be used for make appropriate
decisions. It will increasingly awareness and interested of the need which improve their capacity
to serve effective services and facilities to the poor people. They can analyse and examine the
competitive environment which is important for recognise competitive advantages and priority
market segments. They can generate income and development for weaker section in rural region
through cultivatable self employ in the form of micro enterprise and income creating activities in
agriculture, animal husbandry. Microfinance institutions are helpful in providing required
services and facilities to the poor and needy people in order to fulfil their demand and needs
effectively. They can also make improvement in credit availability through banking networks to
rural women. MFIs improved self confidence and courage to the rural women who are try to
became independent and entrepreneur by establishing business. It is improved knowledge and
consciousness on children's teaching, wellness, nutrient and organic process and environment.
But improvement in these services are required for poor and needy people. There are various
areas where they are required to perform their duties and responsibility in order to eliminate all
issues and challenges of people.
36

Along with this, it can be analysed that microfinance is an effectual in improvement of
weak section particularly poor and backward class people through cultivatable self occupation so
Grameen bank are offer them loans and funds which help them in start business. Through which,
they can easily reduce their poverty and other issues. The bank can offer them additional funds
which assist them in gaining education, increasing skills, knowledge and develop awareness on
health, food and nutrition, self employment and so more. The Grameen bank is the rural bank in
Bangladesh which can provide micro credit to the rural poor, especially for women who own less
than half an acre of land and such assets does not exceed the value of land. Grameen bank can
make improvement in their services and facilities which they are offered to the country people.
Such as increasing loan, easily money transfer, payment service and insurance to poor and low
income households and their micro enterprises. They can not cover financial services but non
financial assistance that includes training and business advice. There is no system and procedure
to operate and modulate the eventual charge of interest to the associates by
RBI/NABARD/government. They are required to make improvement in services and facilities
which are offer to the needy and poor people. It can be recommended that microfinance play an
important role in reducing the weakness and hazard of the poor people which is already enforced
and proved with microfinance program. With the help of government, Grameen bank can easily
reduce poverty which is required for the country and various job opportunities are offered for
increasing living standard of people. Grameen bank can provide appropriate training and
development sessions to their employees through which they are easily gain attention of poor
people to take their rights. The bank provide a platform for people with new business idea and
they can make some innovative changes in this for gaining maximum profitability. For this, they
can enhance their standard of living in Bangladesh. They are provide required loan which are
satisfying the need and demand of poor people in better manner. Microfinance bank are play an
important role in poverty reduction of respective country. The main goal and aim of government
is to seek in reducing poverty as many job opportunities are provided to the people. There are
various services and facilities are offered to the country poor people in order to increasing their
standard of living. They required to develop such schemes and plans which are helpful for needy
people and for this they can easily survive their lives in better way within the nation.
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