Essays in relationship banking and small business lending

Formed in December as a means of ending foreign domination of the chemical industry.

Essays in relationship banking and small business lending

Challenges Facing the Microfinance Sector Generally, since the beginning of government involvement in microfinance in the s, the sub-sector has operated without specific policy guidelines and goals.

This partially accounts for the slow growth of the sub-sector, and the apparent lack of direction, fragmentation and lack of coordination.

The Roles of Small Scale Industry in Nigerian Economy

There has so far not been a coherent approach to dealing with the constraints facing the sub-sector. Among the constraints are inappropriate institutional arrangements, poor regulatory environment, inadequate capacities, lack of coordination and collaboration, poor institutional linkages, no specific set of criteria developed to categorize beneficiaries, channeling of funds by MDAs, lack of linkages between formal and informal financial institutions, inadequate skills and professionalism, and inadequate capital.

Better coordination and collaboration among key stakeholders including the development partners, government and other agencies, could help to better integrate microfinance with the development of the overall financial sector.

Secondly, traditional commercial banking approaches to microfinance delivery often does not work. According to traditional commercial banking principles, the credit methodology requires documentary evidence, long-standing bank-customer relationship and collateral, which most micro and small businesses do not possess.

Therefore there is room for expanding the microfinance sector in Ghana. For example, Barclays Bank of Ghana BBG Ltd launched a microbanking scheme in December which establishes a formal link between modern finance and susu [ 8 ] one of Africa's most ancient forms of banking collection in an unconventional mobile initiative across the country.

The scheme aims to extend microfinance to some of the least affluent in Ghana, like the small trader at the market or the micro-entrepreneur selling from road-side stalls. Ghana's 4,strong Susu Collectors offer basic banking to the needy. For a small fee they personally gather the income of their clients and return it at the end of each month, providing greater security for their client's money.

In addition, with finance from Barclays the Susu Collectors are able to provide their clients with loans, helping them to establish or develop their business.

Not only are we creating an account for Susu Collectors to deposit their funds, we are also providing them with loans of their own, which they can 'lend-on' to their customers, helping them build their capital. In the process, we are laying the building blocks for a truly financially inclusive society.

Currently, over three quarters of Ghanaian society may not have access to high street banking. We are also providing capacity building training to Susu Collectors to make sure that they do their credit risk correctly and any training needs they may need". It is gratifying to note that the Government of Ghana has adopted microfinance as one of the important strategies for poverty reduction and wealth creation.

Recognizing the role various institutions and individuals can play to ensure the achievement of this national vision of achieving the MDGs and also becoming a middle income country by the yearthere is the need to quicken the pace of reforms in the microfinance sector in order to unleash its full potential for accelerated growth and poverty reduction.

Finally, while Ghana has a reasonably diversified and supervised regulatory framework for formal financial institutions licensed by BoG, there is concern that appropriate regulation needs to be extended to other institutions operating in the microfinance sub-sector for example the legal framework for credit unions in order to improve the outreach, sustainability and efficiency of savings, facilitate credit delivery, and institutional arrangements.

The specific challenges facing the industry are discussed into more detail below. Due to the lack of defined areas of operation, the roles and responsibilities of stakeholders currently overlap in some cases. The overlap is also due partly to the fact that organizational and institutional hierarchy and reporting relationships among all the stakeholders are not clearly defined.

Commercial banks could play an increasing role. There is the need therefore to clearly define relationships and roles to enhance effective implementation and delivery of services. Nevertheless, the staffing and competency level being achieved with these training programmes is still below what is desired.

The random and incoherent nature of training programmes has also probably hampered the achievements of the projected gains for the sub-sector, as the flaw in the human capacity of all the stakeholders may have had a rippling effect on the governance and structure of the industry.

Infrastructural capacity in the sub-sector is yet to be developed around an integrated and holistic logistical support and internal operating systems. Funding for the sub-sector has been from three sources: Firstly, available funds have not fully 'met the needs for developing and expanding the sub-sector; and, secondly, the varying sources come with their conditions, and distort the market in some cases.

There is no framework for categorizing and upgrading some of the emerging microfinance institutions in the semi-formal and informal sub-sectors in accordance with their operational capacities and capabilities.

The objective of microfinance is to provide resources for the poor. Nonetheless, there is yet to be adequate, reliable and acceptable methods for classifying various poverty levels to enhance the categorization of potential and actual MFI clients and other forms of support that may be more appropriate for some groups.

This target group in particular could benefit from complementary skills training programmes. The existing skills training and funding arrangements for women do not seem to be market-driven.

Thus, specific services and products that target women for entrepreneurship development to enable them engage in economic activities and become more self-reliant need to be more coherent.

Young people aged years account for about a third of the population of Ghana and constitute over half of the unemployed population.

There is a need for special microfinance, grant and training programmes that target the youth for entrepreneurial development 6. Approaches to and methodology for data and information gathering at the national level are not uniform, making it difficult to centrally monitor progress of the sub-sector.

Essays in relationship banking and small business lending

The current attempt to develop a national data bank on microfinance is yet to be fully realized.Visit Tuition Funding Sources for access to over 7 million scholarships worth over $41 billion.. Here’s how it works: Create your profile at Tuition Funding Sources.; Research and apply for scholarships as early as your freshman year of high school and continue applying every year throughout high school and college.

Small Business Credit Availability and Relationship Lending: The Importance of Bank Organisational Structure The issue of credit availability to small firms has garnered world-wide concern r ecently. Innovation in Small Business Lending: The Art and Science of Microcredit The history of microcredit program can be traced back since 18th century where Credit Coperatives and charities provided small entrepreneurs in Europe (Hollis et.

al., ). Citibank offers a wide variety of business credit products including small business loans, commercial mortgages and lines of credit.

Finance your small business with Citibank. Have Citibank® Banking Card, will travel. Get easy access to your accounts online, by phone and at ATMs. Relationship Banking;. a small-business lending bank set up by the European Bank for.. Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services.

Mar 18,  · Money And Banking Essays (Examples) direct subsidies, and indirect subsidies through government lending programs." These authors stress that encouraging lending to small business purports the Small Business Administration's (SBA's) primary policy objective of the loan-guarantee program.

(although small) and significant relationship.

Relationship Banking