Research on the economic and social development of countries in Africa demonstrates that there are a host of issues that must be addressed in the context of improving daily economic conditions for individual citizens. While some of these issues have been addressed by government agencies and through foreign direct investment, many scholars have observed that microfinance, while a viable means for individual economic development, has not been widely established as a means to promote economic development and growth in many countries. As such, at the present time, microfinance is being underutilized in the efforts that have been initiated to improve the economic conditions that exist in developing nations. With the realization that microfinance has been widely underutilized for improving the economies of developing nations, there is a clear impetus to examine the potential for microfinance to improve economic outcomes for individuals living in developing parts of the world. Using this as a basis for investigation, this research considers the current state of microfinance in Benin, Africa. This investigation starts with a broad overview of the current economic conditions that exist in Benin, followed by an examination of the current microfinance structures that have been initiated in the country.
[...] Although the organization is relatively young in terms of the long history that has been developed under FECECAM, it is clear that CMMB has been established for the true purposes of creating a mutualist environment for all citizens to take an active role in the process of banking. According to information published about the organization, CMMB was established as follows: Confronting the difficulties of accessing credit from commercial banks, workers in the tourism industry (drink vendors, restaurant and hotel workers) organized themselves to form the CMMB in the interest of promoting mutualist principles and in the spirit of taking initiative and allowing members to access credit at a lower cost” (CMMB, 2005). [...]
[...] Conclusion A critical review of the microfinance institutions that have been established in Benin demonstrate considerable growth in this industry overall. Most of the microfinance institutions examined above continue to show considerable growth, especially in the area of providing loans. Despite the fact that microfinance institutions in Benin have witnessed considerable growth in recent years, it is quite evident that these organizations are not large enough to provide service to the more than 5 million rural poor living in Benin. [...]
[...] Porter and Agnikpe (1997) argue that microfinance in Benin is an issue of critical importance, given the fact that a considerable share of the country's GDP comes from agricultural exports. As noted by these authors: “Agricultural potential remains enormous and the needs for credit in this sector significant. Credit is required for cotton cultivators, the main cash crop in Benin, as well as producers of food crops [ ] Fishermen also have significant credit needs. Finally, herders and livestock breeders require access to credit (p. [...]
[...] Lolila-Ramin (2005) in her examination of the legal structures that have been put in place to regulate the development of microfinance in Benin reports that the West Africa Monetary Union or WAMU was established in 1973 to govern monetary policy for Benin and seven other countries in West Africa. In 1994, the Canadian International Development Agency (CIDA) funding law number 94-040, was established to regulate microfinance institutions in countries under the protection of WAMU. PARMEC, or Project d'Appui à la Réglementation sur les Mutuelles d'Epargene et de Crédit, was established as a means to elevate status of the microfinance industry” and influence the growth of the microfinance sector in West Africa. [...]
[...] This organization subsequently evolved into a “women's bank.” Thus it is not surprising to find that the organization's central mission is to “offer financial services adapted to the needs of poor women and to increase their capacity to act in their own practical and strategic interests” (ASSEF, 2005). The current products offered by the organization include voluntary savings and loans and insurance. Principle sources of capital for the organization include: shareholder capital, savings, loans, and grants (ASSEF, 2005). ASSEF has what is considerable growth in recent years. [...]
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