Professional Documents
Culture Documents
Some of the fee based activities are Managing the capital issues (pre-issue and postissue) Arrangement of funds from financial institutions for the clients projects. Assisting in obtaining Govt. clearances.
based activities. Some of them are: Project advisory services Planning M&A Capital restructuring Recommending changes in the management structure Joint venture agreements Rehabilitation and restructuring of sick companies Hedging risks (exchange rate risk, political risk)
FINANCIAL INNOVATION
Customer needs are dynamic Market is volatile and uncertain Therefore the financial intermediaries have to
innovate.
products and profits have been affected. Keen competition: Many entrants in the financial sector. Therefore to out beat competition. Economic liberalization: economic measures have opened up new opportunities, deregulation of exchange controls has brought foreign competitors
Advanced technology helps to link issuers with investors. (GDR issue) Customer service: Customers expect newer products at a lower cost, customer sophistication, customized product Global impact: Financial intermediaries have become active and ready to assume more credit risk. (Lehman Brothers) Investor awareness: Investors are shifting their investment from physical assets to financial assets, not risk averse any more.
FINANCIAL ENGINEERING
It is the design, the development and the implementation of innovative financial instruments and processes and the formulation of creative solutions to problems in finance.
approaching; but Joshuna Begum (Begum) unlike her neighbours was not worried about her house getting damaged during the monsoon. Her house now had a tin roof, mud walls and wooden windows, a luxury in rural Bangladesh. Earlier, Begums house had a straw roof and bamboo walls, which used to get damaged in the monsoon season, forcing the whole family to live in the kitchen.
She got her hut repaired with a loan from the Bangladesh
Grameen4 Bank (Grameen Bank). Begum wasnt the only one; there were thousands of people in rural Bangladesh who had improved their living conditions with the help of the microfinance programs of Grameen Bank, a pioneer in microfinance (Refer Exhibit I for more about microfinance). Grameen Bank helped thousands of poor Bangladeshi women to improve their lives by extending loans to them to start. their own enterprises. By 2003, it was reported that between 33-48% of Grameen Bank borrowers had moved above the poverty line5. By 2003, with 1,170 branches across Bangladesh, Grameen Bank was seen as a role model for microfinance all over the world.
across the world -- not only in developing countries like India, Pakistan, and Vietnam, but even in developed countries such as Australia and the USA, where similar schemes were set up to improve the lives of the urban poor (Refer Exhibit II).
CASE?
CAN MICRO FINANCE BE CONSIDERED AS A
SAVERS
F.S
SPENDERS
INCREASED SAVINGS
INCREASED PRODUCTIVITY
INCREASED D.I
INCREASED P.P
INCREASED EMPLOYMENT
9)
Services Working Capital provision through factoring Services Equipment financing through Leasing Financial resources through MFs Long term risk capital through Venture Capital Hedging through Derivatives Credit rating for debentures Development finance by Development Banking Service Specialized services like bill discounting, depository services
Loan syndication
Leasing Mutual Funds Factoring Forfaiting Venture Capital Custodial services Reverse Mortgage
Lack of transparency
Lack of specialization Lack of recent data Lack of efficient risk management system