WEEK 6: ATALK ON MICROFINANCE BY; ASONGO ABRAHAM

    

 Financial Literacy also known as Financial Education is the act of giving people the first-hand knowledge on how to access funds, manage their finances, how to borrow, save and payback. People who need financial literacy are actually the poor, living below the poverty line.

   Micro finance is a financial institution which has its prime motive being that of piloting the poor out of poverty to better their living standards, they do so by providing them with loans at a very low interest rate, teach them how to save and payback their debts. This movement was started by Mohammed Yunus who is seen as the founder of modern micro finance. The reason for the low interest rate is ensure sustainability. Therefore the role of the Micro finance is to help the poor do things differently by training one how to the business before giving him the finances. Before you obtain a loan from a Micro finance institution, you must have the culture of saving; they even try you first by asking you to save a given amount per day, week or so.

   Micro finance is divided into two, the formal and an informal sector. The informal sector refers to those local ones operated by petty traders on daily basis while the formal ones has to do with banks controlled by the central bank.

  Borrowers from a micro finance institution are grouped into common groups where each members of a group is liable for the debt of other group members. This is done to avoid the default. Thus the group acts in place of the collateral security collected by banks.

   The advantages of a loan from a bank over that from a friend is the fact that banks give training on how to use the money, give unlimited amounts in as much as you repay duly and there is greater prospect of continuity. Also, micro finance institutions also effect an insurance cover for its borrowers which is directly connected with the Nigerian Deposit Insurance Cooperation (N.D.I.C) and the Nigerian Agricultural Insurance Cooperation (NA.I.C).

WEEK 6- SNAP THIS

This week, we were requested to go out and snap any thing that represents financial literacy. This exercise is aimed at assessing our understanding and mastery of the course. The following images of children begging for something to eat illustrate a call to action as what we read in text books are equally happening right around us.