Microfinance can be described as type of funding that is provided to small businesses and entrepreneurs who have don’t have usage of traditional money. This includes loans, credit, access to saving accounts, insurance policies and money transfers.
Micro finance establishments are key sources of financing for low income individuals and small business owners that terribly lack access to traditional banking offerings or have zero collateral. These institutions provide you with loans and also other financing offerings at realistic rates.
The goal of this analysis is to understand how microfinance and entrepreneurship are linked in Kazakhstan, a region undergoing transition to a market overall economy. We keep pace with shed light on how microfinance turns small business expansion and formalisation in a transitional context and to explore borrowers’ relationships with MFOs at completely different stages in the process.
The study develops on surfacing literature that reviews a teleological approach to microfinance (Ault & Spicer, 2014; Chliova, Brinckmann, & Rosenbusch, 2015) and advises a more educational inquiry that asks even more open queries about how microfinance relates to entrepreneurial outcomes in transitional situations. This requires taking on methodologies that happen to be more empirically-informed, attuned to the agency every day entrepreneurs plus more contextually-situated.
We explored borrowers’ relationships with MFOs by using a field review of 86 clients in Almaty and Almatinskaya zones in Kazakhstan, which are representative of both the Overseas MFOs that focus on group lending and Private MFOs that offer individual loans to clients. The study also analyzed the relationship between borrowers and their MFOs, which was influenced www.laghuvit.net/2021/12/31/the-role-of-microfinance-institutions/ by a variety of factors which includes their background characteristics, business characteristics and patterns of microfinance use.