Forecasting Effectiveness Of The Exchange Rate Of Euro Finance Essay - Free Essay Example

Sample details Pages: 8 Words: 2297 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? The proposed title for this topic analysis is forecasting effectiveness of the exchange rate of Euro in the conditions of financial crisis. 2. Introduction and Background: There has been significant discussion within the financial management literature regarding the forecasting techniques used to analyse future turbulence within the currency exchange rates. This focus, according to Perry (2009) is due to the fact that any such fluctuations have a direct correlation with the profitability of an international firm. Yu et al (2006) has argued that currency fluctuation has increasingly become an important financial management phenomenon due to its direct correlation with the costing and pricing of the products, supplies, and operations of contemporary firms. It has been argued by Buti van den Noord (2009) that organisations that are only operational within single national economy are also subjected to the turbulence within the hard currencies as a number of raw materials and inputs of the value chain of the firm are internationally traded. According to Yu et al (2006), hard currencies are stable economic units that are used as key trading currencies due t o their relative reliability and stability over extended periods of time. Don’t waste time! Our writers will create an original "Forecasting Effectiveness Of The Exchange Rate Of Euro Finance Essay" essay for you Create order Euro has become increasingly important international currency since it was introduced within the EU on 1st January 1999. Drawing upon Emerging Europe Monitor (2009), it can be highlighted after the initial period of turbulence due to the harmonisation of exchange rates across the EU member states; the currency has become highly stable and is therefore become the second largest reserve currency in the world after the US Dollar. The stability of the currency has been recognised from the fact that it is adopted by more than 16 advanced and developed EU member states, which combined makes the second largest economy in the world based on cumulated GDP and purchasing power parity. This proposed research is therefore aimed at forecasting effectiveness of the exchange rate of Euro in the conditions of financial crisis. 3. Theory and Prior Research: Foreign exchange forecasting have been found as key mechanism across the markets of the world for a number of decades that challenge the efficient market hypothesis, i.e. currencies are rationally priced and reflect all the available information. Sosvilla-Rivero Garca (2005) has provided evidence for return reversal across markets in the long term while analysing the Dollar and Euro exchange rate forecasting. The study has provided empirical evidence by dividing the currencies into winners and losers based on their exchange rate fluctuations in past three years. It was found by the study that losers outperform winners in the five year returns to post-formation of these categories. These findings cannot be explained with rational pricing model, nor can it be explained through weak form of market efficiency. The researchers have explained this change in returns as over reaction of investors to past market and economic information. Dunis Williams (2002) have also linked market efficie ncy with the degree of forecasting within exchange rates while studying the momentum effect. The researchers noticed that investors that followed short term strategies of buying performing currencies and selling losing currencies over a three to twelve month time period resulted in significant positive returns over the three to twelve month holding time. It has been suggested by the researchers that this turbulence in prediction represents that buying and selling past winners and losers respectively will lead to the currency exchange to move temporarily away from their real long term value. Later studies have also found similar results and underlying reasons across the capital markets of the world, for example Jamaleh (2002) has studied twelve biggest European stock markets regarding the underlying reasons for momentum effect and signaled towards the weak form of efficiency as the main cause, which has been compared to the exchange rate forecasting by Savchenko Makar (2010). There is a school of thought that has related semi-strong form of market efficiency with exchange rate fluctuations and suggested that it is one of the major underlying cause of their presence in todays developed currency markets. The semi-strong market hypothesis, according to Sartore et al (2002), suggests that investors can not earn abnormal risk-adjusted returns using any information and data that is publicly available. The hypothesis has been challenged by a number of studies that have concluded that investors in some particular circumstances have been able to earn extra ordinary profits with the publicly available information. Jose (2001), for example has found through his longitudinal research that average returns of large caps were very low given their market beta values, while on the other end the average returns of small caps were too high. A similar such investigation has been undertaken by Mary (2002), who divided currencies into categories based on market capitalisation and average return over the first year after the formation. The study was used data over the period between 1963 and 1990, and found out that small caps during this time period outperformed the large caps by 0.76% on average return per month. Therefore, it can be suggested that market behaved against the predictions of the capital asset pricing (CAPM) model for currencies, which highlights that high caps earn higher than small caps. There has also been a discussion in the literature related to underlying reasons for turbulence in exchange rates that have been focused on the effects of economic announcements that also violates the semi-strong market efficiency hypothesis. One of the key studies in the area has been undertaken by Patrick (1998) that divided the currencies into ten different categories based on the change of earning surprise in the most recent economic and interest announcements. The methodology used by the research was to analyse the performance of each category during the sixty days period after the economic policy announcement. The study found out that the category with the highest value for good interest earnings outperform the category with the worst interest earnings announcements by a degree of 4%. Ales Jaromir (2010) has explained the phenomenon and suggested that currencies with positive earnings announcements have even higher stability in the time period prior to the policy announcement, and at the same time the negative announcements earn relatively higher turbulence. However, in the post announcement period, the currencies with higher earnings surprise also earn significant higher return, which in the case of research of Farhad (2004) is when the categories have been formed. Therefore, it has been suggested by the researcher that there is clear evidence that market under reacts to the new information available and the foreign exchange prices of hard currencies are slowly revised. The literature has also indicated other variables that have been linked with future foreign exchange performance predictions and forecasts. Drawing upon Andrew (2001), it can be suggested that these variables in currency exchanges are fundamentally scaled by pricing and therefore capital asset pricing model (CAPM) should be used. One of the types of scaled price ratio is the book to market ratio and companies with higher ratios are called value currencies, while with lower values are called growth currencies. According to CAPM, the growth currencies should outperform value growth on the basis of risk differentials attached with each, however the empirical evidence from across the currencies markets of the world negate this explanation. Patrick (1998), for example is one of the key empirical studies using major currencies data. The research divided currencies using the book-to-market ratio and calculated the average return for each category the year after their formation. It was found out by the research that value currencies performed 1.53% better than growth currencies in terms of average monthly returns. Drawing upon Buti van den Noord (2009), the difference between the between the average return of the value currencies and growth currencies is termed as value premium. This value premium has not been successfully explained with the help of market beta and price-to-earnings ratios. 4. Research Objectives: The proposed aim of this research is to critically analyse the effectiveness of forecasting the exchange rate of Euro in the conditions of financial crisis. In order to achieve the proposed aim of this study, the researcher has developed a range of specific research objectives, which have been summarised as follows: To critically analyse academic point of view surrounding forecasting of exchange rates in turbulent market conditions To analyse the effectiveness of the popular forecasting techniques that are used within the research to forecast exchange rates of Euro To highlight key issues that have been found to have implications on the future exchange rate fluctuations of Euro in the context of financial crisis 5. Methods and Data: Research methodology, according to Adams Schvaneveldt (1991) is the key towards highlighting feasibility of the research in the context of wider academic and practitioner environment. It has been argued within the research authenticity and reliability of findings of the research is also highly linked with the robustness of the research methodology and data collection strategy. According to Taylor Bogdan (1998) methodology in academic research can be seen as the way in which researchers approach the problem and seek its answers. Saunders et al (2003) has highlighted a prescriptive framework that can be used to achieve a robust methodology, which is referred to as research onion as decision at each ring has implications on the inner sections. The research onion would therefore be used to achieve the aim and objectives set out for this report and have been illustrated as follows: Research Onion (Saunders et al, 2003) 5.1 Methods: The research philosophy that underpins this proposed topic is positivism, which is an epistemological setting that has been used to reach definitive conclusion through positive verification (Saunders et el, 2003). The topic of exchange rate forecasting can be seen to have high degree of objectivity attached to it, which would require conclusive empirical evidence to be proven to hold or not to hold in the context of contemporary financial crisis. This is the reason that the research has found deduction to be aligned towards achieving the aim and objectives of this proposed research. The selection of epistemological philosophy and research approach for this proposed research has their implications on data collection strategy, which has been explained in the following sub-section. 5.2 Data: The researcher proposes multiple method research methods, which would help in achieving triangulation of data (Saunders et al, 2003) and the diverse range of research objectives of this proposed study (Taylor Bogdan, 1998). These methods include the following: Secondary Quantitative Research: The secondary quantitative data surrounding historical Euro exchange rate data would be collected along with the key macro, micro and meso business environment changes that have impacted on the turbulence and fluctuations within the exchange rate data. Drawing upon Adams Schvaneveldt (1991), secondary data collection can help in acquiring audited data that has already been checked for its internal consistency, therefore reducing overall time and resource allocation. It has been argued by Saunders et al (2003) that secondary data provides the advantage of collecting both longitudinal and cross sectional data, which is the requirement of this proposed research, where forecasting and exchange rate data surrounding Euro would be required in both traditional and contemporary sense for the purpose of comparison. Semi-Structured Interviews: The primary data surrounding the effectiveness of different forecasting methods used for Euro exchange rate will be achieved through semi-structured interviews with forex traders. According to Taylor Bogdan (1998), this data source can help achieve significant insight into the topic under analysis and can therefore help recommend changes to the current forecasting techniques. The sampling technique that would be used to select forex traders to comment on forecasting effectiveness of the exchange rate of Euro in the contemporary financial crisis conditions would be random sampling. Saunders et al (2003) has argued that using semi-structured interviews provides high degree of control to the researcher in terms of focusing key areas that require further elaboration and discussion. 6. Research Ethics: Ethics within the context of academic research has been highlighted by Wells (1994) as the code of behaviour that can be seen as appropriate and acceptable by other academics and practitioners within the field. It can therefore be argued that the definition is broad and subjective, however there are prescribed codes of conduct and ethics highlighted by a number of market research institutions and associations. It should be noted that the only ethical exposure of the current research is associated with the primary data collection, where semi-structured interviews would be collected. Drawing upon Saunders et al (2003), the researcher would therefore develop an informed consent with the interviewees to include any information provided by them into the analysis and final report. In order to streamline the ethical implications of this proposed study, the researcher would therefore use the guidelines of market research given by the renowned MRS association. The use of such ethical underpin nings would help this proposed research, its key findings report and further recommendations to be free from any ethical issue. 7. Time Scale and Resources: It should be noted that the current proposed research is bound by limited time period and resources. The allocation of time and resources has therefore been analysed to highlight the feasibility of this research. Drawing upon Robsons (2002), the research should have low levels of risks in terms of researchers access to the resources required for the research. The key resources required for this research include access to academic literature and secondary traditional data surrounding Euro, which has been negotiated through ATHENS account from university library. The limited time has also been allocated to key aspects of the research and the division of time and labour has been highlighted with the help of the following Gantt chart. In the light of recommendations by Taylor Bogdan (1998), the researcher would use Microsoft Project to keep track of the progress and milestones surrounding the research. Week 1 2 3 4 5 6 7 8 9 10 11 Steps 1 Preliminary research ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   2 Objective Clarification ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   3 Semi-structured Interviews ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   4 Commercial Literature ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   5 Academic Literature ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   ÂÂ   6 Progress Report 7 Data Analysis and Processing 8 Final Report Gantt Chart of Key Activities

To Kill or Not to Kill, That is the Question Essay

To Kill or not to Kill Since ancient times, nations all around the world have been imposing the death penalty for a wide variety of crimes such as rape, adultery, incest, murder, espionage, treason, military desertion, corruption, human trafficking, and even drug trafficking. Execution has been becoming less and less popular each year, but it is still a very controversial subject in today’s society. Some say that execution is unconstitutional, inhumane, or otherwise unfair. Death is feared widely above all other punishment. Capital punishment is not only the strongest deterrent, but it is also the most cost efficient solution to severe crimes, as well as the most effective in actually proving guilt, and bringing fair justice to the victims†¦show more content†¦He fought the point that executing someone with anything less than absolute certainty of his or her guilt was a crime in itself. In more recent centuries, as societies progressed along with other forms of punishment, police forces, an d penitentiaries, capital punishment became less and less necessary to deter people from crime. As the death penalty became less needed so did the need for the executions to be public. Around this time is when the executions begun moving into the prisons out of view of the public. In 1820 however, in Britain, the law still said that crimes as small as petty theft, shoplifting, and cutting down trees in public places were punishable by death. These crimes clearly do not fit the punishments, so juries often refused to convict, or judges would lower the status of the crime just enough to not rate the death penalty. There are many reasons to want the death penalty legalized everywhere, such as deterrence. As long as people fear death (which they always will) common sense tells us that people will be less likely to commit these especially heinous crimes. 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But then there are the other number of people who feel the death penalty should be banned because of its cruelRead MoreEssay Justice System in To Kill a Mockingbird897 Words   |  4 PagesAlthough the dedication of Mr. Finch in â€Å"To Kill a Mockingbird†, even though it turned out against his favor due to an absence of evidence and a debauched court hearing. This court hearing makes readers question whether or not the justice system of that era was fair and in retrospect, a good question is whether or not our justice system today is fair and lawful. If you think that a false conviction was unfair, Tom is eventually killed for his false conviction under a faulty justice system. To me

Micro Environment Free Essays

string(31) " to health and education, etc\." |Chapter | | 1 | Introduction 1. 1 Problem Background There are about three billion people, half of the world’s population, living on the income of less than two dollars a day. Among these poor communities, one child in five does not live to see his or her fifth birthday. We will write a custom essay sample on Micro Environment or any similar topic only for you Order Now One study in 2006 showed that the ratio of the income between the 5% richest and 5% poorest of the population is 74 to 1 as compared to the ratio in 1960, which was 30 to 12. To enhance international development, the United Nations Organization (UNO) announced the millennium development goals,aimed to eradicate poverty by 2015. In this regard, microfinance is the form of financial development that has its primary aim to alleviate the poverty. Governments, donors and NGOs around the world responded enthusiastically with plans and promised to work together towards the realization of these goals. In the recognition of microfinance, the UNO celebrated the year 2005 as a year of micro-credit, as a result this financing instrument is perceived worldwide as a very effective mean against hunger and poverty, mainly in developing countries. Microfinance is a credit methodology, which employs effective collateral substitute for short-term and working capital loans to micro-entrepreneurs. The level of a country’s poverty has long been linked with measures of its economic development. Little consideration was given to the social reorganization of the natural resources (e. empowerment vs. alien ation of people, sustainable use vs. depletion of the environment). The economies with positive growth rate of Gross National Product (GNP) were measured by their poverty mitigation. This gratitude emphasized on the achievement of wealth and technology as a path for development and assumed that improved lives for all would be the natural consequence. Microfinance is not a new development. Some developed countries as well as developing countries particularly in Asia hav e a long history of microfinance. During the eighteenth and nineteenth centuries, in number of European countries, microfinance evolved as a type of the informal banking for the poor. Informal finance and self-help have been at the foundation of microfinance in Europe. The early history of microfinance in Ireland can be traced back to 18th century. It is a history of how self-help led to financial innovation, legal backing and conductive regulation, and creating a mass microfinance movement. But the unpleasant regulations prompted by commercial bankin g brought it down. The so-called Irish loan funds appeared in early eighteenth as charities, initially financed from donated resources and offering interest free loans. They were soon replaced by financial intermediation between savers and borrowers. Loans were granted on short–term basis and instalments were scheduled on weekly basis. To enforce the repayment, monitoring process was used. In Latin America and South Asia, the microfinance has grown out of experiments, but the best-known start was in Bangladesh in 1976, following a widespread famine in 1974 and a hard-fought war of liberation in 1971. Its origin can be traced back to 1976, when Muhammad Yunus set up the Grameen Bank, as an experiment, on the outskirts of Chittagong University campus in the village of Jobra. The inspiration of Grameen Bank came to Muhammad Yunus’ mind when he lent the equivalent of $26 to $42 to exploited women who were working as bamboo furniture maker. He saw that, they were enthusiastic about it and paid back their loans on time. In the beginning, Muhammad Yunus focused the activities of Grameen Bank mainly on savings and small loans, and decided to put the interest rates high enou gh to cover the expenses. Finally yet importantly, he asked borrowers to organize themselves in solidarity groups of five people (who have to meet every week in order to repay their loans and to ex change their opinions). Inspired by the success of his experiment, he decided to spread out this system to other villages in Bangladesh. In 1983, this institution became a bank. Today it operates in almost 36000 villages and serves more than 3500000 people. On 13th October 2006, the Nobel Peace Prize went to Muhammad Yunus and Gramen Bank, the microfinance institution he founded 30 years ago. Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. 2 Eventually we are in a situation, in which Muhammad Yunus, the founder of Grameen Bank, tells us the goal spread of micro-credit and finance, which give us the hope, may be our great-grandchildren will go to museums to see what poverty was like. This report is about microfinance and its contribution to the improvement and poverty alleviation for millions of the poorest people of Bangladesh. Micro finance has a huge impact on the lives of millions of poor people.. Numerous scholars and NGOs have been working to take microfinance within the reach of poor people, who are still not benefited by the conventional financial system. It was believed that microfinance is not important for all people but most groups can benefit from this idea. In this report, we try to present evidence of the important contributions made by microfinance in the eradication of poverty by increasing the income generating activities, empowerment of poor people to access development services such as health and education, and reduction in vulnerability. 1. 2 Problem Statement In the light of problem, background leads to the following problem statement, Impact of Microcredit on poverty alleviation of the poor people in Bangladesh 1. 3 Objectives of the study To be meaningful, every work must have to formulate the objectives of the study. In the light of the topic of the report, the objective of this study is to show how microcredit works, by using group lending methodology for reducing poverty and how it effects the living standard (income, saving access to health and education, etc. You read "Micro Environment" in category "Essay examples" ) of the poor people in Bangladesh. 1. 4 Methodology of the study Data information are mainly collected from secondary sources. We have used several books, research literatures, articles, journals and report, as secondary sources for our study. Internet sources were also used as a secondary source for our report. Since the internet sources are less reliable, we have limited the use of those sources to the web pages of prominent organizations like Grameen Bank. Most of the sources, we tried to use, are reliable and are acceptable almost everywhere. Nevertheless, from them we had to choose the most appropriate literature for our report. For this reason, we had to go through numerous references related to this topic, to find the suitable materials. Besides these, Google Scholars were also used to find the suitable research material. The keywords used when searching for scientific articles and literatures were; microcredit, microcredit and Bangladesh, poverty reduction and microcredit, Muhammad Yunus and microcredit,living standards and microcredit etc. 1. 5 Limitations Due to shortage of time, the accuracy of information may not have been completely flawless. 1. Definitions and Key Concepts Microcredit It is a component of microfinance and is the extension of small loans to entrepreneurs, who are too poor to qualify for traditional bank loans. Especially in developing countries, micro-credit enables very poor people to engage in self-employment projects that generate income, thus allowing them to improve the standard of living for themselves and their families. Poverty Poverty is a condition in which a person of a co mmumity is deprived of the basic essentials and necessities for a minimum standard of living. Since poverty is understood in many senses, the basic essentials may be material resources such as food, safe dringking water and shelter, or they may be social resources such as access to information, education, health care, social status, political power, or the opportunity to develop meaningful connections with other people in society. According to the World Bank’s (1980 ) definition of poverty, condition of life so characterized by malnutrition, illiteracy, and disease as to be beneath any reasonable definition of human decency. Extreme Poverty/Absolute Poverty Extreme poverty is the most severe state of poverty, where people can not meet their basic needs for survival, such as food, water, clothing, shelter, sanitation, education and health care. Eradication of extreme poverty and hunger by 2015 is a Millennium Development Goal set by UNO. To determine the number of extreme poor people around the world, the World Bank characterizes extreme poverty as living on the daily income of US $1 or less. It has been estimated that around 1. 1 billion people currently live under these conditions. Moderate poverty It indicates the condition where people earns about $ 1 to $2 a day, which enables households to just barely meet their basic needs, but they still have go for many of the other things – education, health care –that many of us take for granted. Relative Poverty It means that a household has an income below the national average income. Micro finance Institutions (MFIs) A microfinance institution is an or ganization, engaged in extending micro credit loans and other financial services to poor borrowers for income generating and self-employment activities. An MFI is usually not a part of the formal banking industry or government. It is usually referred to as a NGO (Non-Government Organization). |Chapter | | 2 | Theoritical Framework 2. 1 What is microcredit? Microcredit is the extension of very small loans (microloans) to the unemployed, to poor entrepreneurs and to others living in poverty who are not considered bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor. 2. 2 Features of microcredit †¢ Size – loans are micro, or very small in size †¢ Target users – micro entrepreneurs and low-income households †¢ Utilization – the use of funds – for income generation, and enterprise development, but also for community use (health/education) etc. †¢ Terms and conditions – most terms and conditions for microcredit loans are flexible and easy to understand, and suited to the local conditions of the community. Usually micro-credit is provided to a particular geographical area or community. †¢ Micro-credit funds are sometimes initiated in response to the needs of a particular group. †¢ Some loan circles and lending institutions require participants to attend ongoing business training and mentoring programs, which is not the case with traditional debt lending. †¢ Micro-c redit is recognized as having increased risk and is treated as a separate class of product by lenders. †¢ Its mission is to help the poor families to help themselves to overcome poverty. It is targeted to the poor, particularly poor women. 2. 3 Classification of microcredit I. Traditional informal microcredit (such as, moneylender’s credit, pawn shops, loans from friends and relatives, consumer credit in informal market, etc. ) II. Microcredit based on traditional informal groups (such as, tontin, su su, ROSCA, etc. ) III. Activity-based microcredit through conventional or specialised banks (such as, agricultural credit, livestock credit, fisheries credit, handloom credit, etc. ) IV. Rural credit through specialised banks. V. Cooperative microcredit (cooperative credit, credit union, savings and loan associations, savings banks, etc. VI. Consumer microcredit. VII. Bank-NGO partnership based microcredit. VIII. Grameen type microcredit or Grameencredit. IX. Other types of NGO microcredit. X. Other types of non-NGO non-collateralized microcredit. |Chapter | | 3 | Major MFIs and their role in Bangladesh Back during late 1970s, when the Jobra experiment was underway under Professor M. Yunus, the Dheki Rin Prokolpa was ini tiated by the Bangladesh Bank in collaboration with the Swanirvar Bangladesh, and several other pilot schemes were initiated by a handful of the NGOs who were active then. At that time, it was difficult then to conceive that these initiatives would lead to a major micro-credit movement, which would make Bangladesh known to the rest of the world. Even during the 1980s, in spite of Grameen Bank’s success, the main discourse amongst development practitioners in Bangladesh centred on the desirability of micro-credit program as opposed to concientization. By 1990, unhindered experimentation in the fields led to a quiet resolution of the debate and the country experienced a massive expansion of micro-finance activities during the 1990s. This is borne out by the figures on the time path of MFI expansion (see Figure 1), [pic] Many studies and surveys have been carried out by different agencies regarding the working of MFIs and their impact on the poor people in Bangladesh. The agencies like Bangladesh Institute of Development Studies and World Bank have found strong evidence that functioning of MFIs have helped the people in meeting their daily needs and at the same time building their assets. It has been stated in The World Bank Economic Review that microfinance has not only helped people to develop in their material capital but also in the human capital, by better access to health care and education system, and general awareness among the people about their rights and duties towards society. However, there are numerous MFIs working in Bangladesh at present so it is almost impossible to mention all of them. Therefore, we have chosen four of the most important ones and try to give the overview of them. 3. Bangladesh Rural Advancement Committee (BRAC) With a vision of â€Å"a just, enlightened, healthy and democratic Bangladesh free from hunger, poverty, environmental degrad ation and all forms of exploitation based on age, sex, religion and ethnicity†, BRAC started as an almost entirely donor funded, small-scale relief and rehabilitation project to help the country overcome the devastation and trauma of the Liberation War. Today, BRAC has emerged as an independent, virtually self-financed paradigm in sustainable human development with its motto ? Alleviation of poverty and empowerment of the poor. It is the largest in the world employing 97,192 people, with the twin objectives of poverty alleviation and empowerment of the poor. Through experiential learning, BRAC today provides and protects livelihoods of around 100 million people in Bangladesh. Diagnosing poverty in human terms and recognizing its multidimensional nature, BRAC approaches poverty alleviation with a holistic approach. BRAC’s outreach covers all 64 districts of the country. 3. 1. Microfinance Programs of BRAC, at a Glance (Source: BRAC Annual report 2005) |Inception of micro finance programme |1974 | |Programme coverage |Districts 64,Thanas:507 | |Total No of Area/Branch Offices |1,381 | |Total No of village Organizations |160,197 | |Total No of Members |4,837,099 | |Percentage of Women Members |98% | |Outstanding Borrowers |4,159,793 | |Cumulative Loan Disbursement |165,794 million (US $3,094) | |Members’ Savings |9,159 million (US 141 milli on) | |Average Loan Size |9,452(US $145) | |Repayment Rate |99. 49% | 3. 2 Grameen Bank The history of origin of Grameen Bank can be traced back to 1976, when Professor Muhammad Yunus, head of the Rural Economics Program at the University of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor. The initial activities started from Jobra village (adjacent to Chittagong University) and some in th e neighboring villages in the following years. Later in 1979, with the sponsorship of central bank and support of the nationalized commercial banks, the project was extended to Tangail, a district north of Dhaka. Later the Grameen Bank became an autonomous organization through the government legislation of October 1983. Today, Grameen Bank is mainly owned by the people whom it serves and they own 90% of its shares and remaining 10 % are owned by the government. 3. 2. 1 Microfinance Programs of Grameen bank, at a Glance (Source: Gra meen Bank annual report 2007) |Numbers of Members |7. 5 million | |Percent of Women Members |97% | |Number of Canters |99,502 | |Number of Villages covered |59,912 | |Number of Branches |2,499 | |Number of Areas |81,334 villages | |Number of Zones |21 | |Cumulative amount Disbursed since Inception |256,497. 40 (Million Taka) | |Cumulative Disbursed durin g |2005 39,183. 49 (Million Taka) | |Amount of Loan outstanding |27,970. 31 (Million Taka) | |Members |20,138. 7 (Million Taka) | |Non-Members |11,521. 19 (Million Taka) | |Portfolio Growth Rate |39. 66% | 3. 3 Association for Social Advancement (ASA) ASA in Bengali means ‘HOPE’. ASA is a non-governmental organization based in Bangladesh, which provides micro-credit financing. It was established in 1978 by Shafiqual Haque Choudhury who is also the current chairman. Its functioning is basedon the institutional support system. Innovations and simplifications of staff training, monitoring and bookkeeping are the three areas responsible for ASA’s ability to effectively manage established units and pursue bold growth initiatives simultaneously. This makes the operations smooth and efficient. This makes it simple and easy to operate both for the organization and for the clients, without the unnecessary delays of bureaucracy and red-tape. Its mission is to â€Å"reduce poverty and improve the quality of life of the poor through the provision of qualitative and responsive micro finance services in an innovative and sustainable way†. ASA offers a successful alternative microfinance model to that of the Grameen bank. ASA combines low cost operations and high growth to fuel its success. ASA continues to perfect the role of financial intermediation by developing a variety of savings p roducts that are quite successful at generating the necessary funds from local sources. The experiences of ASA’s managerial dynamism and replication of its simple model have much to offer the diverse microfinance sector as it accommodates demand for quality Financial services by the poor masses. ASA is confident that a financially viable microfinance sector that provides competitive financial services to its customers will be able to expand outreach at a pace similar to its own. 3. 3. Microfinance Programs of ASA, at a Glance (Source: ASA Annual Report 2005) |Inception of micro finance programme |1978 | |Programme coverage |Evenly distributed over the country | |Total No of Area/Branch Offices |2,291 | |Total No of village Organizations or groups |178,904 | |Total No of Members |5. 99 millions | |Percentage of Women Members |Not sex biased | |Outstanding Borrowers |4. 8 millions | |C umulative Loan Disbursement |33,082 million (Taka) | |Total Members’ Savings |3,036 million (Taka) | |Average Loan Size |Taka 7,129 | |Avg. savings balance by members |Taka 748 | 3. 4 Proshika Immediately after the ‘WAR OF LIBERATION’ in 1971, a group of young men, who could realize the inadequacy of the conventional development practices, began to plan development activities with an alternative appr oach. With an objective to contribute to rebuilding the war-ravaged country, they formed Proshika Manobik Unnayan Kendra (Proshika Centre for Human Development). The development process of PROSHIKA, one of the largest NGOs of Ban gladesh, started in a few villages of Dhaka and Comilla districts in 1975, although the organization formally took its first step in 1976. Proshika is an acronym of three Bangla words, proshikkhan (training), shikkha (education) and kaj (action). PROSHIKA envisages a society, which is economically productive and equitable, socially just, environmentally sound, and genuinely democratic. The main mission of PROSHIKA is to conduct an extensive, intensive, and participatory process of sustainable development through empowerment of the poor. Through empowerment, the poor are or ganized and made aware of the real causes of their impoverishment, a leadership is developed among them, their material resources are mobilized, income and employment is increased, and capacities are developed to cope with natural disasters. Empowerment makes th e poor functionally literate, enables them to take better care of their health, to get involved in environmental protection and regeneration, get elected in local government bodies and community institutions, and provides the poor with better access to public and common property resources. 3. 4. 1 Microfinance Programs of PROSHIKA, at a Glance ((Source: PROSHIKA Annual Report 2005) |Numbers of Members |2. 7 millions | |Percent of Women Members |Approximately 60% | |Number of Groups |148,039 | |Number of Villages covered |23559 | |Number of Slums |2102 | |Number of Households |2. 3 millions | |Number of primary Groups |148,039 | |Cumulative Disbursed during 2005 |Taka 31,870 millions | |Number of Education Centres Set Up So Far |53,616 | |Persons graduated with technical skills |1. 11 millions | |Chapter | | 4 | Impact of Microcredit Program on Poverty Alleviation 4. What the microcredit clients do with the loan money In one of the country’s large formal MFIs, it was found that about sixty eight per cent of the clients used 54% of their total loans for small trades. A few clients used 64% of the loan money for buying homestead and cropland. A small number of clients used 67% of the loans to build new houses. Some spent 15% of the total loan for medical treatment of their relatives and themselves. Some spent 19% of the total loan money for consumption purposes. A few clients used 29% of loan money for sending their relatives abroad for jobs. A smaller number of clients used 18% of their loan for major repairing of their dwelling houses. A handful of clients used 42% of the loan for buying television sets, furniture and gold ornaments, while others used the loan money in buying rickshaws, livestock and lending to others in a modicum scale . In another large non-governmental organisation (NGO)-MFI, it was spotted that fifty per cent of the clients used 95% of the total loan money in trading businesses like vegetables, grocery, fish, and betel leaves, etc. A few clients used 40% of the loan money in repaying occasional borrowed debts. Some clients used 35% in agricultural farming. Some used 37% of the total loan for buying livestock for rearing. A few clients used 41% loan money for redeeming mortgaged cropland. Some clients used 61% of the loan money for sending relatives abroad. Again some used 34% of the loan money for meeting the debts from moneylenders. Some clients used 15% of the total loans in repaying loan installments of other NGOs. Some clients used 17% of the loan for medical treatment. Some used 100% loan for house construction, while others used the loans for buying land, rickshaw vans and consumption purposes. Yet again in another large NGO-MFI in the country, about fifty per cent clients were noticed using 66% of the total loan in running their businesses. Several clients used 43% of the total loan for marriage ceremony of their family members. A few clients used 38% of the loan for house construction and repairing. Some used 32% of the total loans in repaying loans of the local moneylenders. A few clients used 59% of the loan for various litigation purposes. Some clients spent 41% in food consumption. Some clients used 67% loan for weaving purposes. Others used the loans for medical treatment, buying livestock, cropland, taking others land for cultivation and repaying loan installments of other NGOs. In a mid-level MFI operating in the urban areas, cent per cent clients used 86% of the total loan in various types of businesses that include grocery, cattle hide, computer composing, photocopy service, commercial phone service, saree selling, etc. Some clients used 84% of the total loan for house construction. A few clients used 81% of the total loan in buying land in the villages where they hailed from. In a pretty tiny NGO-MFI, some clients were found using 74% of the total loans for buying fishing equipment like nets and boats, etc. Some clients used 46% of the loan for buying livestock. A few used 74% of the loans as business capital. Some kept 52% of the loans as savings in the commercial banks, while others used the loan money for repairing houses and meeting medical costs. 4. 2 Impact of Microcredit The major objective of microcredit (MC) is to create income among poor households and thereby alleviate poverty. In this respect the question can be asked at two levels, first, whether MC leads to an improvement in income and second whether the increase in income is sufficient to lift them above the poverty level. There is also a third aspect related to the second that is whether poverty alleviation takes place on a sustained basis. Though most impact assessment studies examine the impact of MC on income, the analyses concentrated on mainly the first question. It should be mentioned that most studies consider the total impact on growth of income and do not examine whether a redistribution of credit fund has a redistributive impact on poverty and income of households 4. 2. 1 Findings of PKSF ME Study by BIDS Palli Karma-Sahayak Foundation (PKSF) commissioned a longitudinal Monitoring and Evaluation Study (MES) which was conducted by the Bangladesh Institute of Development Studies (BIDS). Started in 1997, the studies were completed in 2001. The study covered 3026 sample households spread over 91 villages located in 13 of PKSF POs operational areas. A census was administered in late 1997, covering 19151 households in 91 villages. The first and the second round surveys under the study were administered in 1998 and 1999 and the third and final round survey was conducted in 2000. Some findings on the impacts of microcredit as presented here are gleaned from the reports and papers prepared by BIDS. The summary of the PKSF-ME Study by BIDS is shown in the Table below- Table: Impacts of Microfinance (compared to non-participants) Broad Category |Indicatiors |Type of Change |Cause of Change | |Economic Impact |Income |+ |Self employment activities | | |Food Security |+ |Greater access to cultivab le land through the | | | | |rental market | | |Wage (land poor) |+ |Transport and other non-agril activities sup. by MC| | |Employment (land poor) |+ |better access to the land rental market | | | | |Wage emoloyment in non-ag. sector | | |Assets (land poor) |+ |av. ow land size than non-participants | | | | |larger operational holding | | | | |impact of MF (poultry livestock, bi-cycles, | | | | |rickshaw/van) | |Social and other |Fertility and contraceptive use |+ |program participation | |development impacts | | |female methods dominate | | |Health and Nutrition |+ |program placement effect | | |Sanitation and drinking water |+ |program participation | | |Literacy and school enrollment |+ |program participation | | |of children | | | | |Social mobility |? |do not vary significantly | | |Women articipation and HH |+ |participation in a MC program | | |welfare | |increasing women’s income | 4. 2. 2 Measuring the Impact of Microfinance Grameen Bank has been tracking the progr ess of its clients in achieving all ten indicators since 1997, and reports that 55 percent of its established members (Grameen annually surveys all clients who have been in the program more than five years) had crossed the poverty line by the end of 2004: [pic] (Source: CIA World Factbook: http://www. cia. gov/cia/publications/factbook/geos/bg. tml) This is an impressive achievement, and exactly the type of information that one might hope any MFI would be tracking. Though it might seem arbitrary to determine that achieving all ten indicators constitutes movement out of poverty, in fact all poverty lines are to some degree arbitrary, and they are meant to quantify whether or not families are meeting basic needs—such as those represented in the Ten Indicators. Knowing that 55 percent of established Grameen clients never go hungry, have access to safe drinking water, and send their children to school is important to Grameen. Table 1: Poverty rates among Grameen Bank members vs. Non-participants, 1984-85 |Grameen members |Target non participants |All households | | | |Grameen |Comparison |Grameen |Comparison | | | |villages |villages |villages |villages | |Moderately poor (percent) |61. 0 |83. 7 |80. 4 |61. 5 |76. 3 | |Extremely poor (percent) |48. 0 |76 |74. 4 |47. 1 |54. 6 | Table 2: Poverty rates among Grameen Bank members vs. Non-participants, 1996-97 |All households | | |Grameen |Comparison | | |villages |villages | |Moderately poor (percent) |18 |57. 5 | |Extremely poor (percent) |15 |54. 5 | Table 1 and 2 suggest that Grameen Bank members are substantially less poor than non-members, and that Grameen Bank’s activities affected the poverty levels of entire villages. The centerpiece of the findings of a survey is that every additional taka lent to a woman adds an additional 0. 18 taka to annual household expenditure—an 18 percent return to income from borrowing. Notably, the returns to male borrowing were considerably lower, only 11 perce nt. The paper and the book reported a variety of â€Å"wider† impacts, including: †¢ A one percent increase in credit to Grameen women increased the probability of girls’ school enrollment by 1. 86 percentage points. †¢ A 10 percent increase in credit provided to women increased the arm circumference of girls by 6 percent. †¢ A one percent increase in credit to women increased the height-for-age of both boys by 1. 42 percent and girls by 1. 16 percent. Microcredit is not merely an instrument for credit extension to the poor borrowers. It is a movement to emancipate the poor to alleviate their poverty, improve their quality of life, and build their capacity and awareness and to integrate them economically and socially into the mainstream of the economy. The benefits of microcredit go beyond the quantifiable ones, there are other benefits, which are not seen, but are evident in the socio-economic transformation of rural Bangladesh. |Chapter | | 5 | Conclusion We have come to the conclusions that there is a noticeable and positive impact of microcredit activities on the living standards, empowerment and poverty alleviation among the poor people in the society. If one can help, a poor person to stand on his own that cannot only bring about a revolution in their lives but also in the society. The dream of a healthy and educated society with no discrimination and biased can be achieved through this simple thought, the dream which seems to be coming true and becoming practical. The simple vision of one man, Muhammad Yunus has taken the shape of the revolution and has shown the ray of hope in the path of life to every human, irrespective of his background or status or position. The hope of a life that no one will sleep hungry, no one will die due to lack of medication, our children can read and write on their own and everyone will be the pillar of the society. Scope for further research The current study did not consider the reasons of motivation to join the microfinance program. Another area that has not been investigated is the difficulties that the borrowers face to repay the loan. These areas deserve to be studied by future researchers in the field. There is also another field, which is neglected in our study that the supply gap of MFIs. Actually, to what extent the MFIs are capable to deliver their service to the poor people. Further research could be conducted in this area and for finding the reasons for the gap between demand and supply in terms of microfinance services. References www. google. com Grameen Bank official website (www. grameen-info. org/) ASA official website (www. asabd. org) BRAC official website (www. brac. net) PROSHIKA official web site (www. proshika. o rg/) Rahman, R. I. , 1994, Impact of Credit for the Rural Poor: An Evaluation of Palli Karma Sahayak Foundation’s Credit Program, Report Nr: 1207, BIDS, Dhaka. (found on the internet) The World Bank, 1996, Staff Appraisal Report, Bangladesh Poverty Alleviation Micro-finance Report 1, South Asia Region. (Found on the internet) Khandker, S. R, 1998, Micro-credit Programmes Evaluation —- A Critical Review, IDS Bulletin of International Development Studies 29 (4), 11-19. (Found on the internet) Measuring the Impact of Micro? nance: Taking Stock of What We Know (December 2005) – by Nathanael Goldberg. (Found on the internet) Impact of Microfinance on Living Standards,Empowerment and Poverty Alleviation of Poor People: A Case Study on Microfinance in the Chittagong District of Bangladesh. -by Mohammad Arifujjaman Khan and Mohammed Anisur Rahaman. How to cite Micro Environment, Essay examples

Popular Music and Project Essay Example For Students

Popular Music and Project Essay World cultures Period blue My project was on the West Side Lobsters and my group consisted of myself, Tyler, and Nick. A challenge that we faced was choosing the right pictures to fit the slides. Even though we were able to customize our flag and pick some very good photos, in the end we werent able to find the photos we originally intended to use. If I could hanged anything I think I would have changed my attitude about the whole project. I wasnt acting very serious when we were doing the project. I also think this reflected on our grade. I also would have taken a bigger part in this project. I only made 3 slides and was assigned to make sure there were no grammatical errors and I think I couldve handled a bigger part in the project. What I really learned from this project is If you dont act a certain way around your group mates they will assign you a stupid art. I also learned the important of writing down the password to your email. Write it everywhere. My favorite part of this project was writing our national anthem. I loved how we were able to adapt our anthem too modern and popular song. This made it easier to find a beat to say our anthem to. I liked how we received Jolly ranchers for singing our national anthem in front of the class. It was well worth the embarrassment. My least favorite part of this project was when I couldnt get my mail to work because I didnt know my password. This is the only negative thing I could think of while doing this project. Doing the actual project was very fun and I have no complaints. Honestly I loved doing this project. I loved presenting in front of the class, working in small groups picked randomly, and most of all I liked working in the air conditioned computer lab on hot days. Over all this was a great project and I hope we can do another project like it in the future.