Microfinance implementations and efficiency of fund resources

The unemployed or low-income individuals have some problems to benefit financial services from banks due to being below the poverty line. These kind of people are lacking in collateral and income as adequate as reaching the basic financial services. Because of no access to services, microfinance system was founded to help these kind of people for being reached the financial services. The objective of microfinance is to give an opportunity to be self-sufficient of impoverished people. Microfinance offers broad financial services to its customers such as credits, savings, insurance and money transfer. The most common service is microcredit which is described as providing small loans at a low-interest rate to low-income people. In this way, people who are below poverty line can start their own business or small entrepreneurs can improve their occupations. Microfinance institutions (MFI) offers many activities and programs for impoverished people to start and expand their business. The most well-known microfinance institutions are Grameen Bank and World Bank. In 1983, Grameen Bank was founded and its goal is to support impoverished people to access the required initial capital and remove inconsistency between poor and financial markets. For supporting these people, it has loaned small amounts of money without needing collateral. The World Bank is mostly active in Developing Countries and it reaches at least 16 million low-income people. In Turkey, except those successful and prominent organizations, Maya and Turkish Foundation for Wate Reduction(TİSVA) have implemented some microfinance practices for women. Through their practices, they target to incline of women's income, provide better conditions for living, giving them more education opportunities. As the result of all the targets, women can gain both economic and social freedom. According to the literature, in the microfinance implementations, microcredit services are mostly used and these words are also interchangeable. But recently, microsavings is the one of the most crucial service for being used as allocation of funds to needer. This study is made relying on the microsavings and microcredit practices of TGMP. The following issues are examined during the research: How the funds are allocated to targeted groups, which services are used, which problems are faced and their importance for the participants. Moreover, this study is made for determining whether funds are used effectively. The data that is conducted in the study is collected about three months. This collected primary data is analyzed through SPSS and survey results are considered. The effect of the type of taken services are considered on knowledge about all kind of services, problem encountered and effective use of funds. Besides, some analyses are made to control the effects of taken services. The implementation of the study is made in two different areas through TGMP and the data is collected from these places. First one is İstanbul as an urban area while second location is Sivas as rural area. The data collection process proceeds about 3 months and 141 women participate to the study. The questions that are related with personal information of participant like age, xx education levels are asked to determine the profile of the target groups. The effects of standard structure on the participants who have different ages, education levels and diversified purposes are identified. During taking the microfinance services, the problems of these participants who have different characteristics are detected. Their knowledge and efficient usage of the funds are also determined. With the help of those variables, the access of women to the required financial services is examined. Finally, depending on that, the survey results are acquired. The study is consisting of 6 basic chapters. In first chapter, the objective of thesis, research questions, scope and method of thesis is mentioned. In second chapter, some required descriptions about microfinance system is clarified. Also, the occurrence of system and improvements, fundamental principles, specifications and purposes of the system, target groups and sources of funds are considered. In the parallel of the whole system, the purpose of the microcredit is thoroughly examined. This part can be seen as a literature review because of the fact that all positive and negative features of the system is mentioned. In third chapter, literature is reviewed and the practices of the microfinance especially microcredit in the world and our country is expressed. The features of existing implementations and institution which is responsible of the practices is mentioned. The practices of the world is clarified with regarding to continental basis while the practices is expressed on institutional basis. In forth chapter, the model and the method of the study is expressed after credit and saving methodologies are stated. In fifth chapter, the analysis conducted is clarified one by one. During providing the funds, the analyses are made to measure the knowledge of participants about the all types of services. Besides, some analysis about the problems which they could encounter and efficient use of funds are done. All analysis and detailed consequences of them is expressed in that part. In last chapter, summary, results and recommendations are detailed. According to the literature, the problem is that most implementation is conducted in undeveloped countries. The successful implementations in those countries cannot be useful for developing or developed countries. For example, the example implementation of Bangladesh is copied in France but the results cause to disappointment. So the standard structure could be changed with regarding to condition of the countries. Besides, in the Turkey, microfinance implementations are similar with Bangladesh. As mentioned before, this standard structure is required to be reviewed for obtaining better consequences and reaching more people. Thus, the points that could be changed in the implementations and the efficient usage of the standard structure is searched for an answer after determining the effects of the supports to allocate the funds. For that, the survey is made through the knowledge of the women about all the supports types, the encountered problems and using of the funds efficiently. One of the most significant results of the study is that type of taken services is effective on knowledge of participants about the all kind of services and supports, reaching the participant's purposes with using funds efficiently and making savings. It doesn't affect other variables except those. Moreover, another crucial result is related with the moderator effects of geographic area variable on the dependent variables. According to the results, geographic area variable affects knowledge of participants and the problems that occur because of forming group. The interaction of geographic area and types of services does not affect any dependent variables. Another result is related with purposes of participants to apply the support of TGMP. This variable does not individually affect any dependent variable. As mentioned before, geographic area is xxi effective on knowledge of participants and group problems. The interaction of these variables affects the group problems, reaching the purposes with using efficiently of funds by participants. Even though some problems occur during utilizing funds efficiently for making savings and accessing more people, women don't only have better quality living conditions but also they have more active social life. Another remarkable point in terms of group solidarity is that although diversified implementations can be required for urban or rural areas, it helps to remind some important values which become almost meaningless such as cooperation and neighborhood.