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Comparative Analysis Of Credit Institute

   

Added on  2021-04-16

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COMPARATIVE ANALYSIS OF CREDIT INSTITUTION IN PROVISION OF CREDIT 1Comparative Analysis of Credit Institutions in Provision of Credit.By [Name]CourseProfessor’s NameInstitutionLocation of InstitutionDate

COMPARATIVE ANALYSIS OF CREDIT INSTITUTION IN PROVISION OF CREDIT 2Table of ContentsComparative Analysis of Credit Institutions in Provision of Credit..............................................................31.0 Brief introduction..............................................................................................................................31.1 Background of the study....................................................................................................................31.2 Justification........................................................................................................................................51.3 Business discipline and academic areas related to the research.......................................................5LITERATURE REVIEW....................................................................................................................................62.1 Introduction.......................................................................................................................................62.2 Theoretical framework......................................................................................................................62.3 Provision of financial services............................................................................................................72.4 Debates within the literature............................................................................................................82.5 Linkages between formal and informal financial institutions............................................................92.6 Conceptual framework....................................................................................................................102.7 Summary of literature review..........................................................................................................113.0 Critical Analysis of a Text.....................................................................................................................114.0 References..........................................................................................................................................16

COMPARATIVE ANALYSIS OF CREDIT INSTITUTION IN PROVISION OF CREDIT 3Comparative Analysis of Credit Institutions in Provision of Credit.1.0 Brief introduction A credit institution is an official chartered institution that receives deposits, providesavings and checking accounts, and provide loans among other services. This paper will researchcredit institutions in providing credit. Many people or firms take loans to finance their businessesto do major projects, credit institution has been to their rescue in providing them with this fundsand paying later at a profit (Crouhy et al, 200). Before getting credit from the credit institutions,some documents must be filled, and collateral is taken to the bank. The amount of money, whichcan be loaned to the individual, depends on the value of the collateralWhen there is breach in contract by the borrower, the credit institution with the help oflaw has the right to take the collateral that is of the same value as the credit given and trade it tocompensate for the loss. Credit institutions have been of great benefit to small businesses and thegovernment since it contributes to the development of economy by funding entrepreneurs to starttheir own business (Mosley & Hulme, 2006). Therefore, this paper will analyze creditinstitutions in the provision of credit.1.1 Background of the study Provision of credit has widely been considered as one of the most important sources offinance for most people in the world at large. Greater populations in the country both in the ruraland urban areas acquire credit from various credit institutions to facilitate their developmentalactivities (Muldrew, 2016). Loans help increase family income and therefore help the less

COMPARATIVE ANALYSIS OF CREDIT INSTITUTION IN PROVISION OF CREDIT 4fortune collect their capital funds and therefore enable them to invest in activities that generateemployment With the growing population and an increasing lack of employment, more people acquireloans to fund their entrepreneurial projects. However, financial institutions such as commercialbanks are reluctant when it comes to catering to the needs of small lenders as per their lendingterms and conditions (Chaibi and Ftiti, 2015). There is a myth in financial institutions that it isalmost impossible to loan the poor as they cannot present the required security or collateral andtherefore considered as un-creditworthy In accordance with some survey (Leone and Porretta, 2014), most people are withdrawing from SACCOS, and this begs for the question, what is happening with the provisionof credit in SACCOS now that was not earlier before. This is in line with the fact that in the recent past years, SACCOS were considered the best in the provision of credit Alongside formal financial institutions, Informal financial institutions have alsoembraced financial transactions relating to the provision of credit in many countries Knowledgeacquired after informal finance indicates that most of the rural poor, a good example beingwomen, in most get better access to the informal credit facilities as compared to the formalsources. This has also been proven as per the reports obtained from the surveys of credit themarkets. This, in turn, leads to the question: Why have informal financial institutions succeededeven in circumstances where formal institutions have failed?Another credit institution that has grown over time is the category of microfinance institutions. One of their main features is that they do have a large number of clients regardless of the fact that their total asset base is so small as compared to the traditional financial institutions. They provide credit to the less fortunate who do not have or have little collateral and

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