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Christian Microenterprise

Christian Microenterprise. David Bussau and Russell Mask Chapter 3 Reviewed by Abigail East. Income Generation. 1.I15th percentile i.e. selling merchandise on sidewalks)High quality MED work at this level results in: less: vulnerability, minimal: employment opportunities. High

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Christian Microenterprise

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  1. Christian Microenterprise David Bussau and Russell Mask Chapter 3 Reviewed by Abigail East

  2. Income Generation • 1.I15thpercentile i.e. selling merchandise on sidewalks)High quality • MED work at this level results in: less: vulnerability, minimal: employment opportunities. High • impact=sustaining jobs, low impact: creating jobs • 2.micro-enterprise(1-10 employees) MED=more: Income, employment • 3.small-enterprise(11-50) MED=more: Income, employment • 4.medium-scale enterprise(51 or more) • 5.large-scale enterprise • Continuum of Economic Activities (Figure 1)

  3. Savings Schemes • · Take place among people who know each other • · Relatively small amounts of money • · Multiple functions(credit+trade+commerce=insurance against risk) • INFORMAL FINANCE SCHEMES(3 important elements)

  4. Poor People Save • Important note: poor people save and have been doing so in the 2/3 world for centuries, relying on informal mechanisms to save. • Informal Finance- all financial transactions, loans and deposits, occurring outside the regulation of a central monetary or financial market authority.

  5. ROSCA Size/Purpose: 15-30, up to 60. Fixed amount /week lottery • Use: consumer goods, investment etc • Getting Started with OneNote Page 2 Use: consumer goods, investment etc • Longevity: time bound • Attraction: simple and transparent

  6. ASCA • ASCA’s • Methodology: not time bound or fixed amount • Ex. Credit Union, Burial society • Longevity: as members see fit • Functions: insurance services • Challenges: transparent if time bound. savings accountability is a problem with larger amounts • Interest: on loans, balancing out inflation • Excess cash managed by loaning to other credit unions

  7. Promote, Provide or Partner? • NGOS and missionaries considering microfinance and/or MED need to research current community schemes and extent of assistance to community • 1. Promoter: help poor set up program/self managed scheme • 2. Provider: sell service to the poor • 3. Partner: existing provider 3 OUTSIDER OPTIONS • 1. TIME HORIZON • 2. SUSTAINABILITY • 3. DIRECT SERIVCES • 4. GOALS FOR OUTREACH • 5. LINKAGES • 6. MACROECON AND POLITICAL CONDITIONS

  8. Incorrect MED •  Inappropriate loans: burying people in debt ie student loans •  Subsidized credit: not real market environment •  Low repayment rates: reduces confidence, increases cost •  Local government programs: often misappropriated or misused •  Unfair preference: i.e. believers/cliques • How to INCORRECTLY implement MED • 1. Est. $ after all production costs are subtracted • 2. Est. and quantify “senior claims” i.e. food, fuel • 3. Assess likely problems during loan i.e. weather

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