FINANCIAL INCLUSION- Give people a job not a loan

Dr. A. Graziosi has carried out an unusual analysis on the current financial inclusion approach and achieved innovative conclusions, combining both desk work and lessons learned while managing and evaluating development projects over the past three decades.

The Author has developed his ideas drawing on the recommendations emerging from G-20, 2015-Post Evaluation Analysis, Rio+20 meetings and the recent launch of Sustainable Development Goals. Within this background information he has worked out a proposal within the picture of a comprehensive, genuine and structured framework, having as a reference the Consultative Document on microfinance activities released within Basel III in 2010 and then updated in 2015, all of which has inspired his work.

According to the Author, to understand the current approach to financial inclusion a preliminary step is to look into the microfinance trend, which is the main vehicle to expand financial products in favour of poor people.

He claims that, over the years, microfinance activities have disclosed situations that have been in contradiction with the fundamentals of fair contractual terms, along with inappropriate assumptions and inconsistency of the methodological approach.

Starting from this point, the Author has elaborated on Basel III document to restore a correct decision making pro- cess and, in so doing, reinstate the truthful significance of credit, which means confidence. He said that sustainable microfinance is the best way to create durable jobs and eradicate poverty.

On financial inclusion he has a pioneering position and has raised a word of caution on what he has called the easy way to digitalization of micro financial services; what is more, he claims that financial inclusion without economic inclusion could be a disillusion for the lender, an illusion for the client and a likely implosion for the community.

In this context, Dr. Graziosi provides an attractive approach, which is well synthesized in the book sub-title “Give people a job not a loan”. With this declaration the Author has almost phased out the financial way to development and replaced it with the EMPLOYMENT-BASED WAY TO DEVELOPMENT, thus re-designing the entire architecture of the approach in favor of poor people.

He has investigated into the position of microfinance as a circuit of the global finance and therefore its trend to re- produce the ups and downs of the financial capitalism trend and its inadequacy to foster the emerging economies as well.

In addition, he has completed his viewpoint by investigating the contractual conditions of experts, consultants and practitioners working overseas with donor-funded program. On this matter, he has concluded that Practitioners/ Experts/Developers employment status has implications for the quality of the outcome. https://www.amazon.com/Financial-Inclusion-Give-people-loan-ebook/dp/B01ENJP37S/ref=sr_1_2?ie=UTF8&qid=1465837424&sr=8-2&keywords=financial+inclusion#nav-subnav

 

 

 

 

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JAMBO FUND TWOFOLD OBJECTIVE

JAMBO FUND aims at  providing assistance and money for Start-up and Growth Business, the former without the latter being inconsistent. It will do it by assisting (parallel objective) MFI to achieving a performing position in the market, in the projection that the sector has been facing the following three big challenges: 

UNDERCAPITALISATION (inadequate capital), DIGITALISATION ( new products) and MANAGEMENT (new style of management), which ask for money and assistance.

In this model MFI, Retail Banks, Rural banks, Cooperative Banks, etc shall work as a driving belt, their role and responsibility to be discussed with the Investor.

What’s more, the FUND has been designed in the picture of SDGs Objective, implementation will show what the real meaning of FINANCIAL INCLUSION, besides WhatsApp, namely jobs’ creation and provision of opportunities focusing on the real economy in a financialising world.

MICROFINANCE & POVERTY – Give people a job not aloan

Dr. A. Graziosi has carried out an unusual analysis on microfinance trend and achieved sharp conclusions, combining both deskwork and lessons learned managing and evaluating development projects ialong with the publicist’s activities.

The Author has developed a reasoning taking from the recommendations emerging from G-20, 2015-Post Evaluation Analysis, Rio+20 meetings and the launch of Sustainable Development Program. Within this background information he has worked out a proposal within the picture of a comprehensive, genuine and structured framework, having as a reference the Consultative Document on microfinance activities released within Basel III in 2010, which has inspired the Paper.

Before talking on the position and role of microfinance in the financial market, the Author has tried to provide an intriguing answer to the following questions:

  • Microfinance has been proposed as a new idea, but it wasn’t new at all. Why?
  • When, how and why has microfinance been recommended as a tool to fight poverty?

Both inconsistencies and discontents have emerged in the implementation of microfinance activities, which deteriorated the concept of credit.

According to the Author, over the years microfinance activities disclosed situations that have been in contradiction with the fundamentals of fair contractual terms, along with inappropriate assumptions and inconsistency of the methodological approach.

Starting from this point, the Author has elaborated on above Basel’s document to restore a correct decision making process and in so doing reinstate the truthful significance of credit, which means confidence. He said that sustainable microfinance is the best way to create durable jobs and eradicate poverty.

Besides looking into above factors, he has investigated on the position of microfinance in the context of the global finance, where the former is a circuit of the latter and therefore its trend shall reproduce the ups and downs of the financial capitalism trend.

The Author has concluded the reasoning inviting industry’s insiders to join the debate with contributions in a way to have an outcome where each one and everybody could provide his own idea and direct experience. In this understanding the paper could be a vehicle to gather in one vision different experiences and expertise.

https://independent.academia.edu/AscanioGraziosi/Papers

SIMILARITIES BETWEEN CAPITALISM AND MICROFINANCE

A – The first and the most apparent parallel is: both CAPITALISM AND MICROFINANCE are under siege.

B – Capitalism is far way from the genuine idea dated two century ago; microfinance depreciated the original message of charity organizations and micro loans amid the industrial revolution. What has been proposed late seventies has been whether incorrectly applied or short in supply an appropriate methodology. At the 17th Microcredit Summit Mr. M. Yunus admitted that microfinance failed the overall goal to fight poverty because it has been wrongly applied.

C – The turn down of the finance function to fuel the real economy highlighted the dark side of both way of doing business with the emerging of greedy lenders and insatiable bankers.

D – Microfinance has been conceived within the capitalism system. The pioneers, although originally from Asia Sub-Continent, are expression of the financial establishment: to improve people well being, they didn’t propose to provide them with a job, but to give them a loan.

E – They privileged the financial economy to the detriment of the real economy. This isn’t a negligible factor on the grounds that the amount of financial economy, namely the floating money, is ten times bigger that the monetary counter value of the real economy, that’s to say the gross internal product of all countries as a whole.

  • It hasn’t been estimated the amount of millions of hard currencies injected in the field under microfinance’s poverty eradication flag.
  • It is unknown the number of roads, hospitals, schools and infrastructural works might have been completed without the financial crisis.
  • It hasn’t been calculated the value of long-term investments in key African sectors along with the creation of millions of durable jobs.
  • Although the counter value of above dilapidation of resources can’t be quantified, it has been has been huge.
  • However we know that the ordinary people have paid the negative impact of both capitalism’s failure and bad microfinance: shareholders, honest borrowers, taxpayers, the bulk of the resources for poverty mitigation coming from governments and donors.

F – Academics and practitioners have argued on the inconsistency and lack of sustainability of the microfinance activities. On capitalism side it has emerged lack of market competitiveness and short sighted governance.

G – Microfinance’ re-thinking may be seen in the picture of the most recent revisions of capitalism but for the time being we can’t predict anything, on the grounds of the following:

  • The financial disasters in Bangladesh, Bosnia, Cambodia, India, Morocco, Pakistan, Nicaragua and, above all, Andhra Pradesh State suicides, along with the lack of credibility of the founder of Grameen Bank didn’t produced the expected drastic changes.
  • Microfinance has rapidly becoming an old fashion idea, but having deep and widespread roots and its own establishment with an attentive media support.
  • Despite the new orientations on development economics (Post-2015 Evaluations, G-20 and Rio+20) and overwhelming literature on the fall of microfinance, the move ahead of a new proposal is very slow. In our opinion what has been proposed so far are excellent pieces of work but not a comprehensive approach.
  • However the central banks have made tangible interventions on market regulations and supervision, taking from the above mentioned Basel III document, despite the media sponsored by the microfinance establishment didn’t comment so much the paper.