Microfinance Impact on Rural Development

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Microfinance Impact on Rural Development
Mrs. Josephine Idele, Partner, Nigeria

Microfinance in the rural areas when properly channeled is of great significance to the development of the rural folks and rural areas.
Many institutions like IFAD, DFID etc. have come into the scene expanding financial services in new directions by making use of technology and innovations to reach many poor people in remote rural communities as well as offering them a lot of products.
However, with all these huge strides, large number of rural folks cannot boast of having a secure way of saving money and other sundry services. Hence it could be inferred that only a minority number of rural people actually benefit from financial services. Another area to pinpoint are the challenges associated with increasing access to financial services such as lack of adequate capacity, low education, weak infrastructure and also institutions. I would want to highlight that in the face of the fast changing global economic terrain comprising financial crisis, high inflation rates, climate change etc., rural financing is key.

Microfinance and Rural Development
I understood you agree micro financing for poor people such as poor farmers helps. In rural areas of emerging countries have no access to money, but there is a nuisance mechanism. "yes!" and of course, no financing system in the world is no risk. The Worldbank is aware of criticisms (and myself, I put a note on their web blog). Statistics showed 20-25% people accepted for funding goods and nobody would deny 75% people of friendly micro-financing mechanisms. These loans are connecting them with there daily concerns of life. Money pocketed help families find a smile on their face, because they don't have monthly debts to refund. If they have, they can make it, due to small amounts. Profits are invested for kids (health, school, food;..) and to develop. It is a profitable cycle.
Also, I added it was so successful, Gramina banks and other microfinance institutions developed quickly in the world (Asia, Africa, Europe, America...)
In France, for example microfinance can go up to $5000 and the government said OK.

10 Tips for Rural Development
Laxman Prasad Paudel, Manager, Nepal
1. Unite all members (male/ female) of the village, neighborhood, etc.
2. Make a village committee/ neighborhood committee/ group / cooperative
3. Treat it as a smallest unit of the government
4. Select or elect a male and a female leader
5. Let them make proposals for their development
6. Grant government assistance in kind, not in cash
7. Reward the best performers
8. Do all these as mission program of the country
9. Monitor and evaluate rightly
10. Then see what happens only in five years.

Tips for Rural Development
1. These tips are interesting and I have assumed their relevance too due to nature of the Nepalese culture. Thank you for these practical tips.
2. Of course, if there are failures in rural development something / somewhere / someway / somehow is missing. Microfinance could be the solution for community members.


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