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The microfinance promise in financial inclusion: evidence from Pacific region

Singh, Baljeet (2011) The microfinance promise in financial inclusion: evidence from Pacific region. UNSPECIFIED.

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Finance is one of the most effective tools not only for growth but also poverty reduction. Increased access to adequate and timely finance improves the welfare status of both producers and consumers. In addition to the relationship between financial sector development and growth, an inclusive financial sector has both indirect and direct impact on poverty alleviation, firstly because of the linkages between financial sector development and more equitable growth and secondly, because of the impact of broadening access to finance – especially to the poor, rural communities and women. Due to failure of formal financial institutions to fully align their services and products to low income and disadvantage groups of people, the microcredit or more broadly microfinance approach was innovated and institutionalized in the Pacific region rural credit system. It was aimed at overcoming the failure of the formal credit system and hence poverty reduction through income and employment generation. As a result microfinance institution has made inroads into the rural areas to improve and extend timely, easy and adequate access to financial services. The present paper examines the nature and the type of the new institutions that imaged in the Pacific region financial system hence making it more responsive and inclusive. The study finds that the micro banking model and Microfinance Institution models are the two dominating microfinance approaches in the post-financial reform in pacific region. The study also find that the microfinance sector in the Pacific region is growing with the government assisted National Microfinance Unit and Cooperative on the one hand and on the other hand, the Non-government organizations are transforming themselves into financial institutions and entering the business of microfinance.

Item Type: Other
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Divisions: Faculty of Business and Economics (FBE) > School of Economics
Depositing User: Ms Shalni Sanjana
Date Deposited: 20 Jun 2011 08:17
Last Modified: 19 Sep 2016 04:40

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