Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Micro-finance alleviates poverty

27.06.2007
Micro-finance can help to fight poverty, which is a fundamental problem in the world. “Women take on the most responsibility and make the best entrepreneurs,” claims professor Torger Reve at BI Norwegian School of Management.

Micro-finance really came under the spotlight after Professor Mohammad Yunus and Grameen Bank in Bangladesh won the Nobel Peace Prize for their work relating to micro-finance.

Grameen Bank is far from being alone in the micro-finance arena. Today, there are around 3,000 micro-finance institutes in existence worldwide. In total, they have more than 80 million clients, impacting on more than 400 million people (including the client’s families), many of them among the world’s poorest.

“Micro-finance is a simple, interest-bearing small loan for poor people who wish to support themselves,” explains Professor Torger Reve at BI Norwegian School of Management.

Reve has for many years been following the growth of micro-finance through his position as chief consultant for the Strømme Foundation, the biggest Norwegian-based player within micro-finance.

Torger Reve, who is Professor of Strategy and International Competitiveness at the Norwegian School of Management BI, gave an introduction to the phenomenon of micro-finance to almost 200 participants at BI Norwegian School of Management’s annual conference, the Johan Throne Holst Conference 2007.

The conference presented BI’s newly established research centre Micro, a centre for development studies and micro-finance, which is led by Professor Anne Welle-Strand.

Finance turned upside down.

“Micro-finance is in many ways conventional finance turned upside down,” says Reve and provides an overview of the seven hallmarks of micro-finance:

1. Lending money to the poor (while traditional finance institutions lend to the rich)

2. Lending primarily to women (while traditional finance institutions lend mostly to men)

3. No security conditions (where traditional finance requires security)

4. Meeting the clients locally

5. Investing in the most important resources – people

6. Emphasis on credibility, opportunities and sustainability

7. Building on local entrepreneurship

According to the BI professor, micro-finance has proved to be an effective tool for creating bread-and-butter businesses that lift families out of the worst poverty.

Success with women

The biggest success is with women. “Micro-finance has proved to be most successful when it is aimed at women in the developing world. It is these people who take on the most responsibility and prove to be the best entrepreneurs,” states Reve, who however warns against viewing micro-finance as being an open sesame. Micro-finance is only the first step of the ladder for business development, which requires at least three steps: micro-finance, talent finance, and market finance.

1) Micro-finance is a small loan combined with training based on life experience. This creates a large number of small bread-and-butter businesses.

2) Talent finance is a more long-term loan combined with training in management school subjects and practical skills, along with an offer of venture capital. Talent finance helps to develop the most promising micro-finance entrepreneurs into viable small businesses providing several jobs.

3) Market finance is a joint long-term loan for the development of a co-operative organisation on the market side. Market finance helps to develop market channels that bring the products to profitable markets.

This article is based on Torger Reve’s lecture “Micro-finance as a tool for development” at the BI Norwegian School of Management’s annual conference, the Johan Throne Holst Conference 2007, held on 14 June 2007.

Audun Farbrot | alfa
Further information:
http://www.bi.no/Content/Article____61157.aspx

More articles from Business and Finance:

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

nachricht Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Wafer-thin Magnetic Materials Developed for Future Quantum Technologies

Two-dimensional magnetic structures are regarded as a promising material for new types of data storage, since the magnetic properties of individual molecular building blocks can be investigated and modified. For the first time, researchers have now produced a wafer-thin ferrimagnet, in which molecules with different magnetic centers arrange themselves on a gold surface to form a checkerboard pattern. Scientists at the Swiss Nanoscience Institute at the University of Basel and the Paul Scherrer Institute published their findings in the journal Nature Communications.

Ferrimagnets are composed of two centers which are magnetized at different strengths and point in opposing directions. Two-dimensional, quasi-flat ferrimagnets...

Im Focus: World's thinnest hologram paves path to new 3-D world

Nano-hologram paves way for integration of 3-D holography into everyday electronics

An Australian-Chinese research team has created the world's thinnest hologram, paving the way towards the integration of 3D holography into everyday...

Im Focus: Using graphene to create quantum bits

In the race to produce a quantum computer, a number of projects are seeking a way to create quantum bits -- or qubits -- that are stable, meaning they are not much affected by changes in their environment. This normally needs highly nonlinear non-dissipative elements capable of functioning at very low temperatures.

In pursuit of this goal, researchers at EPFL's Laboratory of Photonics and Quantum Measurements LPQM (STI/SB), have investigated a nonlinear graphene-based...

Im Focus: Bacteria harness the lotus effect to protect themselves

Biofilms: Researchers find the causes of water-repelling properties

Dental plaque and the viscous brown slime in drainpipes are two familiar examples of bacterial biofilms. Removing such bacterial depositions from surfaces is...

Im Focus: Hydrogen Bonds Directly Detected for the First Time

For the first time, scientists have succeeded in studying the strength of hydrogen bonds in a single molecule using an atomic force microscope. Researchers from the University of Basel’s Swiss Nanoscience Institute network have reported the results in the journal Science Advances.

Hydrogen is the most common element in the universe and is an integral part of almost all organic compounds. Molecules and sections of macromolecules are...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Dortmund MST Conference presents Individualized Healthcare Solutions with micro and nanotechnology

22.05.2017 | Event News

Innovation 4.0: Shaping a humane fourth industrial revolution

17.05.2017 | Event News

Media accreditation opens for historic year at European Health Forum Gastein

16.05.2017 | Event News

 
Latest News

New approach to revolutionize the production of molecular hydrogen

22.05.2017 | Materials Sciences

Scientists enlist engineered protein to battle the MERS virus

22.05.2017 | Life Sciences

Experts explain origins of topographic relief on Earth, Mars and Titan

22.05.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>