Dissertation Idea: UK’s Microfinance Institution

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Dissertation Idea: UK’s Microfinance Institution

April 4, 2016 Sample Papers 0

Dissertation Idea

 UK’s Micro Finance Institutions

UK’s Micro Finance Institutions comprise of those business enterprises which have annual revenues of equal to or less than GBP 1 million, such enterprises are termed as Small and Medium Enterprises (SMEs). These small and In the United Kingdom, traditional banking institutions also offer microfinance services, which include the offering of current accounts, small loans and savings accounts to small enterprises and individuals. In the year 2009, the UK government made regulations for enabling small and medium enterprises to have access to finance. In this regard, the government channeled the lending operations of small and medium enterprises through Enterprise Finance Guarantee.

UK’s Microfinance Institution works with the idea that those small business entities whose business profile is not such that it would render traditional banking institutions to lend them due to high risk.  One major step taken by the government to support microfinance availability was to provide a guarantee for the 75 percent of the amount lent by lending institutions to such small and medium enterprises. In addition to these financing options for small and medium enterprises, there are also Community Development Finance Institutions (CDFIs) which provide loans to such enterprises which in the normal course do not have access to the traditional financial services offered by the traditional banking institutions.

It is pertinent to mention here that although there are a number of UK’s Micro Finance Institutions operating from the UK; their operations are not necessarily limited to the UK region. As noted earlier in the definition section of the microfinance institutions, these institutions are largely set up to support and assist poor or lower and middle classes of a society. These situations are particularly common in underdeveloped and developing countries and, therefore, the presence of microfinance institutions can be expected to be on a higher side in such regions as compared to their presence in developed countries.

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