Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Wits Business School, 2017. / Microfinance Institutions (MFIs) are proving to be a pivotal asset in providing essential access to financial services to the urban and rural poor who are traditionally shunned by the mainstream blue-chip financial service providers in developing countries. However, in the literature, MFIs providing entrepreneurial assistance have been lumped together with MFIs providing a more exploitative and consumption loan offering. This then masks the value or the poverty reducing effect of MFIs that have financial products geared to assist the creation of small businesses for the poor. The aim of this study is to examine South Africa’s microfinance institutions and their impact on poverty reduction in urban and rural areas. To this end the research question is as follows: what is the impact of the MFI on poverty reduction around eThekwini region? This study was conducted among microfinance institutions and the beneficiaries of MFIs in eThekwini region. In order to gain better insights and in order to better understand the real depth and knowledge of this topic, the researcher needed a view of both the service provider and their customers. A structured close ended survey questionnaire was designed for MFI managers and borrowers. The responses received show that Microfinance institutions are a useful means to reduce poverty among the poor. On this basis, it is recommended that the government must play an active role to regulate MFIs but more importantly to find innovate ways to help fund or subsidize their activities among the poor. / MT 2017

In a world where almost half of the population lives in poverty, the alleviation of poverty is a serious developmental challenge for many states. Microfinance has grown in popularity as a means for achieving poverty reduction all over the world. Due to the success of microfinance institutions, such as the Grameen Bank, in achieving self-sufficiency and improving the lives of its clients, the expectations for similar institutions are high. MFIs attempt to find a balance between business and development goals. It is not necessarily a contradiction to be a business seeking profit as well as being an institution committed to development. However, the values coupled with these two objectives are sometimes conflicting. Thus it is important to see how equilibrium can be achieved and to note what sacrifices must be made in order to reach a balance. This thesis will focus on examining and assessing the challenges faced by South African MFIs in balancing development goals while at the same time having to be self-sufficient. The Small Enterprise Foundation will be used as a case study to consider the particular experiences of a South African MFI. The evaluation of the unique challenges that the South African landscape presents will provide a context in which to understand microfinance operations and a clearer understanding of the particular problems and challenges faced by the South African micro-finance industry in balancing the achievement of development goals against the imperative to be self sustainable in providing services to the poor. Through that understanding the common conception of what makes a “successful” MFI will also be challenged.

Thesis (MDevF (Business Management))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: In the realm of consumer behaviour research, discussions regarding materialism – commonly defined as the desire to consume – indebtedness and low-income consumerism have become almost unavoidable. This is to be expected in a society where spending patterns are constantly evolving, levels of indebtedness are steadily increasing and interest in the so-called ‘bottom of the pyramid’ consumers has been heightened. In South Africa, studies have found changes in consumption and credit usage to not only be significant, but also particularly relevant amongst low-income consumers. While this changing culture of consumption has been widely acknowledged, there has been little empirical research on consumer behaviour in South Africa and even less on low-income consumerism. For this reason a study was developed, which sought to explore the relationship between materialism and indebtedness among a sample of low-income, instalment paying consumers of South Africa’s leading catalogue retailer. Through use of a mailed self-completion survey questionnaire, consumers of the targeted retailer were asked to indicate their level of materialism, as measured using a materialism scale, and to report their level of indebtedness, measured as the number of retail store accounts held. In addition, key demographic data, consisting of the respondents’ age, gender and monthly income, was drawn from the retailer’s database. Using this data the study assessed whether (i) the sampled consumers displayed strong characteristics of materialism and (ii) whether materialism is a significant variable in predicting the sampled consumers’ propensity for incurring debt. Data analysis techniques applied in this study included tests to measure the reliability of the materialism scale as well as a variety of descriptive and inferential statistical tools, designed to identify relationships in the collected data. Using these techniques, this study found that sampled low-income consumers are indeed highly materialistic, with levels of materialism observed in this study being significantly higher than in a previous materialism study where a low-income earning consumer sample was used. Regarding levels of indebtedness, regression and correlation analysis performed suggested the presence of statistically significant relationships between consumers’ levels of indebtedness and each of the demographic variables of age and gender. However, materialism and monthly income was not found to be significant variables in determining a consumer’s level of indebtedness. While the decision to delineate this study based on the consumers of one particular retailer limits the extent to which findings can be generalised to the larger South African population, the results do provide a number of important insights, which contributes to the scant body of literature on low-income consumer behaviour in this country. / AFRIKAANSE OPSOMMING: Op die navorsingsveld oor verbruikersgedrag het die gesprek rondom die voorkoms van materialisme (wat gewoonlik gedefinieer word as die behoefte om te verbruik), verbruikersdruk en die skuldlas onder lae inkomstegroepe byna onvermydelik geword. Dit is te verwagte in ’n samelewing waar bestedingspatrone voortdurend ontwikkel, skuldlasvlakke aan die groei is en die belangstelling in verbruikers op die onderste vlak van die sogenaamde piramide verskerp het. Studies in Suid-Afrika dui aan dat, onder lae inkomste verbruikers, die verskille in verbruikersgedrag en kredietgebruik nie net opvallend nie maar ook besonder ter saaklik is. Hoewel die verandering in verbruikerskultuur rondom besteding reeds wyd beskryf is, is daar nog nie veel empiriese navorsing oor verbruikersgedrag gedoen nie – en nog minder onder lae inkomstegroepe. Dit is om hierdie rede dat ’n studie ontwerp is om die verhouding tussen materialisme en skuldlas te ondersoek onder ’n steekproef van lae inkomste huurkoopverbruikers van Suid-Afrika se grootste kataloguskleinhandelaar. Daar is gebruik gemaak van ’n vraelys vir die opname, wat aan die verbruikers gepos is en deur hulle ingevul is. Verbruikers is gevra om die vlak van hul materialisme aan te dui, soos gemeet volgens die gebruik van ’n skaal of maatstaf vir materialisme; en om hul skuldlas weer te gee, gemeet aan die aantal rekeninge wat hulle by kleinhandelwinkels het. Belangrike demografiese data, soos die respondente se ouderdom, geslag en maandelikse inkomste, is verkry uit die kleinhandelaar se databasis. Hierdie data is gebruik om te bepaal, (i) of die steekproefverbruikers ’n sterk neiging tot materialisme toon, en (ii) of materialisme ’n beduidende rol speel in die voorspelbaarheid van die mate waartoe die steekproefverbruikers hulle aan skuld sal blootstel. Tegnieke wat in die studie gebruik is vir data-analise sluit toetse in wat die betroubaarheid van die maatstawwe vir materialisme meet, asook ’n aantal beskrywende en afleibare statistiese metodes wat ontwerp is om verhoudings in die versamelde data te identifiseer. Deur die gebruik van hierdie tegnieke het die studie gevind dat hierdie steekproef van lae inkomste verbruikers inderdaad hoogs materialisties is, en dat die vlakke van materialisme wat waargeneem is, beduidend hoër is as wat gevind is in ’n vorige studie onder ’n steekproef van lae-inkomste verbruikers. Met betrekking tot skuldlasverpligtinge, het die regressie- en korrelasie-analise wat gedoen is die bestaan van statisties beduidende verhoudinge tussen verbruikers se skuldlasvlakke en die demografiese veranderlikes van ouderdom en geslag aangedui. Daar is egter gevind materialisme en maandelikse inkomste is nie beduidende veranderlikes in die bepaling van ’n verbruiker se skuldlas nie. Hoewel die ontwerp van hierdie studie om verbruikers van slegs ’n enkele kleinhandelaar in te sluit ’n beperking plaas op die toepasbaarheid van die bevindinge op die wyer Suid-Afrikaanse bevolking, het die resultate ’n aantal belangrike insigte verskaf wat bydra tot die klein hoeveelheid bestaande literatuur oor lae inkomste verbruikersgedrag in die land.

This investigation focused on why the poor are in debt, what they are indebted for, when debt was incurred, why a loan was incurred, and from whom it was aquired and for what purpose. In addition, it investigated the reasons for indebtedness, as well as the possibilities of how this situation may be addressed and the indebtedness reduced.

This investigation focused on why the poor are in debt, what they are indebted for, when debt was incurred, why a loan was incurred, and from whom it was aquired and for what purpose. In addition, it investigated the reasons for indebtedness, as well as the possibilities of how this situation may be addressed and the indebtedness reduced.

The aim of this study is to determine the extent to which the UN/OSCAL (United Nations Office of the Special Coordinator for Africa and the Least Development Countries) model of microfinance is being applied in the South African context, its scope for application and recommendations for implementation. The hypothesis is that, the better South African microfinance initiatives conform to the model, the more successful it will be in fulfilling the ultimate mission of microfinance which is to supply financial services to the poor by cutting the cost of outreach with beneficial effects on poverty..

The aim of this study is to determine the extent to which the UN/OSCAL (United Nations Office of the Special Coordinator for Africa and the Least Development Countries) model of microfinance is being applied in the South African context, its scope for application and recommendations for implementation. The hypothesis is that, the better South African microfinance initiatives conform to the model, the more successful it will be in fulfilling the ultimate mission of microfinance which is to supply financial services to the poor by cutting the cost of outreach with beneficial effects on poverty..

Among the reasons for financial exclusion is the fact that the poor, being largely illiterate and unemployed, are traditionally perceived as ‘bad credit risks’. This is the dominant perception of the poor in the formal credit markets – a perception that also exists in the microcredit sector. In other words, while information asymmetry is a recognized problem in lender-borrower relationships, lenders consider the problem particularly severe when they contemplate doing business with the poor. A contrasting paradigm, such as the one adopted by Grameen Bank of Bangladesh, views the poor as possessing economic potentials that have not been tapped – that is, as ‘good credit risks’. Grameen Bank’s microcredit features appear to have successfully mitigated the problems of information asymmetry and, to a large extent, made it possible for the poor to access microenterprise credit. Using the Grameen Bank model as a benchmark, this study examined the lending features of private sector microlenders in South Africa and those of KhulaStart (credit) scheme. The aim was to identify how the lending features affect microenterprise credit access. Primary data were obtained through interviews, while relevant secondary data were also used in the study. A key finding of the study was that while the Khulastart scheme was, like Grameencredit, targeted at the poor, the method of its delivery appeared diluted or unduly influenced by the conventional (private sector) paradigm that pre-classifies people as ‘good’ or ‘bad’ credit risks. As a result, the scheme was not robust enough to support microenterprise credit access. This has consequences for job-creation and poverty reduction. Based on the findings, the study maintains that a realistic broadening of microenterprise credit access will not occur unless there is a fundamental paradigm shift in microcredit practices, and unless measures designed to mitigate information asymmetries are sensitive to the historical, economic and sociocultural realities of the South African poor.