Microfinance has grown from a small program in the 1970s in Bangladesh to a worldwide movement today. Microfinance is basically the small loans that are granted to the third world poor. Such microloans are usually provided through non-profit, humanitarian organizations. These new mechanisms are often referred to as nongovernmental organizations (NGOs) whose focus is on empowering poor families.
The movement to expand financial services for the poor as a grassroots development strategy is a relatively recent phenomenon. Microfinance, which emphasizes granting small loans to the poorest of the poor without requiring collateral, rests upon the notion that the most impoverished people in developing countries typically do not otherwise have access to traditional financial; services, but that they do possess modest survival skills that make them credit-worthy. Credit programs can offer the poor access to small amount of capital, and, in turn, they use these loans for self-employment projects, to generate income and eventually become self-reliant.
Microfinance was introduced by an economist named Muhammad Yunus in Bangladesh in the 1970s. Before the introduction of microfinance, the worlds poorest people were virtually under-served by financial institutions. This is because poor people generally do not own property, making them unable to offer the necessary collateral needed to secure loans. Most have no credit record. Most lack education or a formal employment record. Many live in rural areas, beyond the reach of traditional banks. And many cannot read or write or sign their own names. Women are often further deterred in that some societies stipulate that only a man may se3rve as guarantor to a loan. Furthermore, most banks would not consider allowing loans small enough to be appropriate in those instances, for the simple reason that transaction costs would be prohibitive. In the absence of formal access to financial services, the poor traditionally had no choices outside of being exploited by local money lenders.
The potential of using institutional credit and other financial services for poverty alleviation in Kenya is quite significant. About 18 million people, or 60 percent of the population are poor and mostly out of the scope of formal banking services. According to the Poverty Reduction Strategy Paper (PRSP) of 1999, a large number of Kenyans derive their livelihood from the (Micro and Small Enterprises) MSEs. Therefore, development of this sector represents an important means of creating employment, promoting growth, and reducing poverty in the long-term. In the past, microfinance institutions (MFIs) established using either an NGO or a savings and credit co-operative societies framework have been important sources of credit for a large number of low income households and MSEs in the rural and urban areas of Kenya. The Government of Kenya recognizes that greater access to, and sustainable flow of financial services, particularly credit, to the low-income households and MSEs is critical to poverty alleviation. Over 100 organizations, including about 50 NGCs, practice some form of microfinance business in Kenya. About 20 of the NGOs practice pure microfinancing, while the rest practice microfinancing, while the rest practice microfinancing alongside social welfare activities. The microfinance sector in Kenya has faced a number of constraints that need to be addressed to enable them to improve outreach and sustainability. The major impediment to the development of microfinance business in Kenya is lack of specific legislation and set of regulations to guide the operations in Kenya are registered under eight different Acts of Parliament namely:
· The Non Governmental Organizations Co-ordination Act
· The Building Societies Act
· The Trustee Act
· The Societies Act
· The Co-operative Societies Act
· The Companies Act
· The Banking Act
· The Kenya Post Office Savings Bank
Some of these forms or registrations do not address issues regarding ownership, governance, and accountability. They have also contributed to a large extent to the poor performance and eventual demise of many MFIs because of a lack or regulatory oversight.
The planned methodology is secondary research. The researcher will make use of published materials such as books, magazines and newspapers to collect data and information regarding the topic. The researcher will also make use of the internet to obtain information about the company such as its background and other related information. For the research, the researcher will mainly rely on secondary data in obtaining the information. Due to inaccessibility of the subject or the case study, other research methods are not applicable. Secondary data are data that have been collected for some other purpose. Secondary data can provide a useful source from which to answer the research question(s). Punch (1998) mentions several advantages of using existing data. Expenditure on obtaining data can be significantly reduced and data analysis can begin immediately, so saving time. Also, the quality of some data may be superior to anything the researcher could have created alone (Thomas, 2004, p. 191). On the other hand, the chosen research method also has several disadvantages. Data that have been gathered by others for their own purposes can be difficult to interpret when they are taken out of their original context. It is also much more difficult to appreciate the weak points in data that have been obtained by others. The data may be only partially relevant to the current research question (Thomas, 2004, p. 191).
Chapter 1 – Background to the Study The Zambian economy has historically been based on the copper-mining industry, which is done the Copperbelt. Output of copper had fallen, however, to a low of 228,000tonnes in 1998, continuing a 30-year decline in output due to lack of investment, and more recently, low copper prices and uncertainty over privatization. In 2001, the first full year of a privatized industry, Zambia recorded its first year of increased productivity since 1973. The future of the copper industry in Zambia was thrown into doubt in January 2002, when investors in Zambia's largest copper mine announced their intention to withdraw their investment. Zambia now needs to depend on other tourism activities to help the economy. The main objective of this study is to investigate Zambia's policy on tourism, and explore mechanisms available to promote this industry elsewhere by identifying tourist attraction areas, and instituting lasting policies by the government, which has …