Table of Contents

Abstract ......................................................................................................................................................... 3 Introduction .................................................................................................................................................. 3 Purpose Statement ....................................................................................................................................... 4 Objective ....................................................................................................................................................... 4 Significance of Study ..................................................................................................................................... 5 Research Question and Hypothesis .............................................................................................................. 5 Research Question .................................................................................................................................... 5 Research Hypothesis ................................................................................................................................. 5 Literature Review .......................................................................................................................................... 5 impact on measures of health, education, or women.s decision-making. ................................................. 6 depth. I show how to use the framework for BancoSol of Bolivia ........................................................... 6 dominant gender ideologies. ..................................................................................................................... 7 referees. All views and errors are our own. .............................................................................................. 7 financial services on a sustainable basis and on a massive scale .............................................................. 9 but also the local economy. ..................................................................................................................... 10 new loans at the branch office................................................................................................................. 10 Summary. Micronance programs and institutions are increasingly important in development ....... 10 practise. ................................................................................................................................................... 12 access to financial services (Bhatta, 2001) ............................................................................................. 13 Model .......................................................................................................................................................... 13 Data/ Methodology..................................................................................................................................... 13 Data ............................................................................................................................................................. 13 Methodology............................................................................................................................................... 14 Descriptive Statistics: .................................................................................................................................. 14 Inferential Statistics: ............................................................................................................................... 14 Limitation and Delimitation ........................................................................................................................ 14 Limitation: ............................................................................................................................................... 14 Delimitation: ........................................................................................................................................... 14 References .................................................................................................................................................. 15

DAVID HULME .................................................................................................................................... 15 January 2003 ........................................................................................................................................... 15 January 2003 ........................................................................................................................................... 15 Jonathan Morduch................................................................................................................................... 15 University of Manchester, Manchester, UK ........................................................................................... 15 Reza Daniels ........................................................................................................................................... 15 Chris D. Gingrich .................................................................................................................................... 15 Patrick Meagher, Vicki Bogan, Willene Johnson, and Nomathemba Mhlangay .................................. 15

Abstract
Wide agreement about the goal of microfinance to improve the welfare of the poor has not led to wide agreement about how best to achieve that goal. To aid discussion, I propose a framework for outreach the social benefits of microfinance in terms of six aspects: worth, cost, depth, breadth, length, and scope. The framework encompasses both the poverty approach to microfinance and the self-sustainability approach. The poverty approach assumes that great depth of outreach can compensate for narrow breadth, short length, and limited scope. The selfsustainability approach assumes that wide breadth, long length, and ample scope can compensate for shallow depth.

Introduction
Wide agreement about the goal of microfinanceto improve the welfare of the poorhas not led to wide agreement about how best to achieve that goal. To aid discussion, I propose a framework for outreachthe social benefits of microfinancein terms of six aspects: worth, cost, depth, breadth, length, and scope. The framework encompasses both the poverty approach to microfinance and the self-sustainability approach. The poverty approach assumes that great depth of outreach can compensate for narrow breadth, short length, and limited scope. The selfsustainability approach assumes that wide breadth, long length, and ample scope can compensate for shallow depth. I show how to use the framework for BancoSol of Bolivia

Policy makers increasingly rely on theories of social capital to fashion development interventions that mobilize local social networks in the alleviation of poverty. The potential of such theor y lies in its recognition of the social dimensions of economic growth. This recognition has inspired some innovative approaches to development, such as the now-popular micro.nance model. In assessing the implications of these recent developments for feminist objectives of social transformation, this paper evaluates prevailing ideas about social capital (rooted in rational

choice theor y) against the grain of three alternative approaches: Marxian social capital theories ( la Pierre Bourdieu), neo-Foucauldian governmentality studies, and my feminist ethnographic research on the social embeddedness of economic practice in a merchant community of Nepal. The paper concludes by bringing these critical insights to bear on possibilities for designing micro. nance programs and practicing a kind of development more generally that could engage womens solidarity to challenge dominant gender ideologies. This note focuses on the downside of microfinance: on the way in which some microfinance activities can damage the prospects of poor people. It is not a polemic that argues that microfinance has failedthere is much evidence, not least from my work with colleagues, that it can help many poor people improve their lives. Rather, it is a reminder that those who provide microfinancial services (referred to here as MFIs, or microfinance institutions, but recognizing that many institutions also provide enterprise development or social development services) need to monitor carefully not only their positive impacts but also their negative effects, look to the future, and not rest on their laurels. The microfinance industry needs to practice more humility about what it has achieved (outside of Bangladesh it has not even scratched the surface of poverty, for example in Kenya less than 70 000 people out of an estimated 9 to 10 million poor people have access to microfinance) and deepen its understanding of the financial service needs of poor people (see Rutherford in this issue).

Purpose Statement
The purpose of this study is to describe the factors that effect the micro finance. and explain the relationship between factors and micro finance. in factors involve saving, interest rate and income etc. micro finance is much important for poor peoples because due to micro finanace they get money.

Objective
To examine the Impact of factors on micro finance

Significance of Study
This study is helpful for manager they can control on affecting factors. This study is helpful for policy makers they take a better decision for micro financing. This study will be helpful for researcher they can get the information about factors of micro finance.

Research Question and Hypothesis

Research Question
What is the impact of affecting factors on micro financing?

Research Hypothesis
H0: There is relationship between micro finanace and affecting factors H1: There is no relationship between micro finance and affecting factors

Literature Review
Microcredit has spread extremely rapidly since its beginnings in the late 1970s, but whether and how much it helps the poor is the subject of intense debate. This paper reports on the .rst randomized evaluation of the impact of introducing microcredit in a new market. Half of 104 slums in Hyderabad, India were randomly selected for opening of an MFI branch while the remainder were not. We show that the intervention increased total MFI borrowing, and study the eects on the creation and the pro.tability of small businesses, investment, and consumption. Fifteen to 18 months after lending began in treated areas, there was no eect of access to microcredit on average monthly expenditure per capita, but expenditure on durable goods increased in treated areas and the number of new businesses increased by one third. The eects of microcredit access are heterogeneous: households with an existing business at the time of the program invest more in durable goods, while their nondurable

consumption does not change. Households with high propensity to become new business owners increase their durable goods spending and see a decrease in nondurable consumption, consistent with the need to pay a .xed cost to enter entrepreneurship. Households with low propensity to become business owners increase their nondurable spending. We .nd no impact on measures of health, education, or women.s decision-making.

Leading advocates for micronance have put forward an enticing ``win-win'' proposition: micronance institutions that follow the principles of good banking will also be those that alleviate the most poverty. This vision forms the core of widely-circulated ``best practices,'' but as a general proposition the vision is fully supported neither by logic nor by the available empirical evidence. Recognizing the limits to the win-win proposition is an important step toward reaching a more constructive dialogue between micronance advocates that privilege nancial development and those that privilege social impact Wide agreement about the goal of microfinanceto improve the welfare of the poorhas not led to wide agreement about how best to achieve that goal. To aid discussion, I propose a framework for outreachthe social benefits of microfinancein terms of six aspects: worth, cost, depth, breadth, length, and scope. The framework encompasses both the poverty approach to microfinance and the self-sustainability approach. The poverty approach assumes that great depth of outreach can compensate for narrow breadth, short length, and limited scope. The self-sustainability approach assumes that wide breadth, long length, and ample scope can compensate for shallow depth. I show how to use the framework for BancoSol of Bolivia

Policy makers increasingly rely on theories of social capital to fashion development interventions that mobilize local social networks in the alleviation of poverty. The potential of such theor y lies in its recognition of the social dimensions of economic growth. This recognition has inspired some innovative approaches to development, such as the now-popular micro.nance model. In assessing the implications of these recent developments for feminist objectives of social transformation, this paper evaluates prevailing ideas about social

capital (rooted in rational choice theor y) against the grain of three alternative approaches: Marxian social capital theories ( la Pierre Bourdieu), neo-Foucauldian governmentality studies, and my feminist ethnographic research on the social embeddedness of economic practice in a merchant community of Nepal. The paper concludes by bringing these critical insights to bear on possibilities for designing micro. nance programs and practicing a kind of development more generally that could engage womens solidarity to challenge dominant gender ideologies.

Microlending is growing in Eastern Europe, Russia and China as a flexible means to widen access to financial services, both to help alleviate poverty and to encourage private-sector activity. We describe mechanisms that allow these programs to successfully penetrate new segments of credit markets. These features include direct monitoring, regular repayment schedules, and the use of non-refinancing threats. These mechanisms allow the programs to generate high repayment rates from low-income borrowers without requiring collateral -- and without using group lending contracts that feature joint liability. We appreciate comments from Jonathan Conning, discussions with Albert Park, Elizabeth Wallace, Michael Taylor, Mark Schreiner, and Craig Churchill, and useful suggestions from two anonymous referees. All views and errors are our own. This note focuses on the downside of microfinance: on the way in which some microfinance activities can damage the prospects of poor people. It is not a polemic that argues that microfinance has failedthere is much evidence, not least from my work with colleagues, that it can help many poor people improve their lives. Rather, it is a reminder that those who provide microfinancial services (referred to here as MFIs, or microfinance institutions, but recognizing that many institutions also provide enterprise development or social development services) need to monitor carefully not only their positive impacts but also their negative effects, look to the future, and not rest on their laurels. The microfinance industry needs to practice more humility

about what it has achieved (outside of Bangladesh it has not even scratched the surface of poverty, for example in Kenya less than 70 000 people out of an estimated 9 to 10 million poor people have access to microfinance) and deepen its understanding of the financial service needs of poor people (see Rutherford in this issue).

The United Nations Millennium Development Goals (MDGs) have galvanized the development community with an urgent challenge to improve the welfare of the world's neediest people. Donor agencies are orienting their programming around the attainment of the MDGs and are mobilizing new resources to reduce hunger and poverty, eliminate HIV/AIDS and infectious diseases, empower women and improve their health, educate all children, and lower child mortality.1 The MDGs are framed as concrete outcomes in the areas of nutrition, education, health, gender equity, and environment. Thus work in these specific areas will be a large part of any development strategy driven by the MDGs. But decades of experience has shown that that progress in these areas is powerfully affected by other factors in the broader context, such as a functioning government, physical security, economic growth, security, and basic infrastructure (for example, transportation). This paper reviews the mounting body of evidence showing that the availability of financial services for poor households ("microfinance") is a critical contextual factor with strong impact on the achievement of the MDGs. Microfinance, and the impact it produces, go beyond just business loans. The poor use financial services not only for business investment in their microenterprises but also to invest in health and education, to manage household emergencies, and to meet the wide variety of other cash needs that they encounter. The range of services includes loans, savings facilities, insurance, transfer payments, and even micro-pensions. Evidence from the millions of microfinance clients around the world demonstrates that access to financial services enables poor people to increase their household incomes, build assets, and reduce their vulnerability to the crises that are so much a part of their daily lives. Access to financial services also translates into better nutrition and improved health outcomes, such as higher immunization rates. It allows poor people to plan for their future and send more of their children to school for longer. It has made women clients more

confident and assertive and thus better able to confront gender inequities. Microfinance clients manage their cash flows and apply them to whatever household priority they judge most important for their own welfare. Thus microfinance is an especially participatory and non-paternalistic development input. Access to flexible, convenient, and affordable financial services empowers and equips the poor to make their own choices and build their way out of poverty in a sustained and self-determined way. Microfinance is unique among development interventions: it can deliver these social benefits on an ongoing, permanent basis and on a large scale. Many well-managed microfinance institutions throughout the world provide financial services in a sustainable way, free of donor support. Microfinance thus offers the potential for a self-propelling cycle of sustainability and massive growth, while providing a powerful impact on the lives of the poor, even the extremely poor. Evidence shows that this impact intensifies the longer clients stay with a given program, thus deepening the power of this virtuous cycle. Unfortunately poor people in most countries have virtually no access to formal financial services. Their informal alternatives such as family loans, savings clubs, or moneylenders are usually limited by amount, rigidly administered, or available only at exorbitant interest rates. The challenge ahead is to ensure access to financial services for the poor majority. This note reviews the evidence on the impact of microfinance as it relates to the attainment of the MDGs.2 Specifically it assesses impact in the areas of eradicating poverty, promoting children's education, improving health outcomes for women and children, and empowering women. Finally, the note addresses the feasibility of reaching significant numbers of the absolute poor with financial services on a sustainable basis and on a massive scale

Microfinance supports mainly informal activities that often have a low return and low market demand. It may therefore be hypothesized that the aggregate poverty impact of microfinance is modest or even nonexistent. If true, the poverty impact of microfinance observed at the participant level represents either income redistribution or short-run income generation from the microfinance intervention. This article examines the effects of microfinance on poverty reduction at both the participant and the aggregate levels

using panel data from Bangladesh. The results suggest that access to microfinance contributes to poverty reduction, especially for female participants, and to overall poverty reduction at the village level. Microfinance thus helps not only poor participants but also the local economy.

Once every week in villages throughout Bangladesh, groups of forty villagers meet together for half an hour or so, joined by a loan officer from a microfinance organization. The loan officer sits in the front of the group (the center) and begins his business.1 The large group of villagers is sub-divided into eight five-person groups, each with its own chairperson, and the eight chairs, in turn, hand over their groups passbooks to the chairperson of the center, who then passes the books to the loan officer. The loan officer duly records the individual transactions in his ledger, noting weekly installments on loans outstanding, savings deposits, and fees. Quick arithmetic on a calculator ensures that the totals add up correctly, and, if they do not, the loan officer sorts out discrepancies. Before leaving, he may dispense advice and make arrangements for customers to obtain new loans at the branch office.

Summary. Micronance programs and institutions are increasingly important in development strategies but knowledge about their impacts is partial and contested. This paper reviews the methodological options for the impact assessment (IA) of micronance. Following a discussion of the varying objectives of IA it examines the choice of conceptual frameworks and presents three paradigms of impact assessment: the scientic method, the humanities tradition and participatory learning and action (PLA). Key issues and lessons in the practice of micronance IAs are then explored and it is argued that the central issue in IA design is how to combine dierent methodological approaches so that a ``t'' is achieved between IA objectives, program context and the constraints of IA costs, human resources and timing. The conclusion argues for a greater focus on internal impact monitoring by micronance institutions. 2000 Elsevier Science Ltd.

ABOUT ONE billion people globally live in households with per capita incomes of under one dollar per day. The policymakers and practitioners who have been trying to improve the lives of

that billion face an uphill battle. Reports of bureaucratic sprawl and unchecked corruption abound. And many now believe that government assistance to the poor often creates dependency and disincentives that make matters worse, not better. Moreover, despite decades of aid, communities and families appear to be increasingly fractured, offering a fragile foundation on which to build. Amid the dispiriting news, excitement is building about a set of unusual financial institutions prospering in distant corners of the worldespecially Bolivia, Bangladesh, and Indonesia. The hope is that much poverty can be alleviated and that economic and social structures can be transformed fundamentally by providing financial services to low-income households. These institutions, united under the banner of microfinance, share a commitment to serving clients that have been excluded from the formal banking sector. Almost all of the borrowers do so to finance selfemployment activities, and many start by taking loans as small as $75, repaid over several months or a year. Only a few programs require borrowers to put up collateral, enabling would-be entrepreneurs with few assets to escape positions as poorly paid wage laborers or farmers.

This paper will evaluate the micro-finance sector in South Africa, its scope and development, and its role in the financial sector and the economy more generally. It is informed by the premise that households and institutions save and invest independently, and that the financial systems role is to intermediate between them and to cycle available funds to where they are needed. Consequently the primary objective of this paper is to understand the key factors that affect the micro-finance (MF) sector. The MF industry was formally (legally) established in 1992 when the state issued an Exemption to the Usury Act that removed interest rate ceilings on small loans under R6,000.00 with a repayment period of less than thirty-six months. Since then there has been phenomenal growth of a formally non-existent industry, providing a good example of how micro-financiers were able to develop given a favourable incentive

system. The rapid growth of the industry provided the impetus for a second Exemption to the Usury Act in 1999, where revisions to the amount of small loans were increased from R6,000.00 to R10,000.00, the Micro Finance Regulatory Council (MFRC) was established to manage the sector, and new regulations to govern the way that micro-loans could be administered and repayments collected were added. However, the growth of the industry has raised as many questions of the financial sectors operation as it has answered those concerning a conducive regulatory climate. Firstly, why has there been such rapid growth in the industry given that SA has a fairly sophisticated financial sector in the first place? Partly related to this is the question of who are the end-users of the loans supplied by the MF industry. Put differently, we need to understand the determinants of the demand for debt, and the segment of society who demands the services supplied by the MF industry. We then need to analyse the parameters of the regulatory framework and identify how lenders are affected by it. Lastly we will provide insights into the structure and performance of the sector in an attempt to augment the discussion. The rest of the paper proceeds as follows. Firstly, the depth, structure and efficiency of South Africas financial sector are discussed in comparative perspective in order to contextualise the discussion. Secondly, the structure and size of the industry are estimated. We then proceed to investigate the demand for debt using the Income and Expenditure Survey (Statistics South Africa, 1995) and an adjusted dataset compiled by Wefa Southern Africa for 1999. Lastly, we turn our attention to the regulatory framework of the sector and the degree to which it complies with international best practise.

limits agricultural investment options. The country is currently plagued by political instability, including a Maoist insurgency. In addition, formal financial markets fail to reach most poor households. According to one recent estimate (CECI, 2001), only 10% of rural households can access formal financial markets. Many government and nongovernment agencies implement a variety of microfinance programs to increase poor households

access to financial services (Bhatta, 2001) This baseline study examines the key elements of Malawis enabling environment for microfinance. It deals with several challenges in Malawis enabling environment as it relates to financial services, with the central focus on those issues most relevant to the innovations being rolled out by Opportunity International Bank of Malawi (OIBM) with the support of the Bill and Melinda Gates Foundation. We compare the quality of the enabling environment, its overall costs and benefits in comparison to alternatives with similarly situated countries. We analyze a few of the enabling environment challenges, including but are not limited to; an adverse credit culture, conservative banking sector, governance challenges, regulation of microfinance, lack of national identity documentation and of information systems supporting commercial finance.

Model

Factors of affecting

Micro finance

Data/ Methodology Data

In this study data is used of twenty five companies from Lahore stock exchange.

Methodology Descriptive Statistics:

Descriptive statistics is the discipline of quantitatively describing the main features of a collection of data. Descriptive statistics are distinguished from inferential statistics, in that descriptive statistics aim to summarize a data set, rather than use the data to learn about the population that the data are thought to represent.

Inferential Statistics:
.Inferential statistics are for generalizing your findings to a broader population group. In inferential statistics we extend your conclusions to a broader population, like all workers, all women In this study we used descriptive statistics and inferential statistics . Data analyzed through Histogram, Descriptive Statistics, Single Box Plot, Correlation and Regression.

Limitation and Delimitation

Limitation:
There are some limitations in conducting the research. Limited financial resources lack of resources for conducting survey Conducted only in Lahore

Delimitation:
This research is restricted within Lahore.

References
ABHIJIT BANERJEE ESTHER DUFLO RACHEL GLENNERSTER CYNTHIA KINNAN, JONATHAN MORDUCH* Princeton University, New Jersy, USA Mark Schreiner June 2002 Katharine N. Rankin Beatriz Armendariz & Jonathan Morduch DAVID HULME Elizabeth Littlefield, Jonathan Murduch, and Syed Hashemi January 2003 Elizabeth Littlefield, Jonathan Murduch, and Syed Hashemi January 2003 Beatriz Armendriz de Aghion Jonathan Morduch DAVID HULME * University of Manchester, Manchester, UK Jonathan Morduch1 Reza Daniels Chris D. Gingrich Patrick Meagher, Vicki Bogan, Willene Johnson, and Nomathemba Mhlangay April 2000