Financial Record Keeping And Challenges In Micro Finance Banks

Financial Record Keeping And Challenges In Micro Finance Banks

Chapter One

Preface

Background To The Study

Micro-finance is the force of loans, savinsgs, and other introductory fiscal services to the poor. People living in poverty, like everyone differently, need a different range of fiscal instruments to run their business, make means, stabilize consumption, and plutocrat transfer services.

fiscal services for the poor have proved to be a important instrument for poverty reduction that enables the poor to make means, increases, and reduce their vulnerability to profitable stress. still, with nearly one billion people still lacking access to base fiscal services, especially the veritably poor, the challenges of furnishing fiscal services to them remains. Accessible, safe and secured deposit services are a particularly pivotal need.

nevertheless, these fiscal institutions have challenges in keeping their fiscal records. fiscal record keeping is so important in any fiscal association that is, it forms the foundation gravestone in which a business is laid and it determines the survival and durability of that business. It gives direction and inflow of conditioning and it brings to light a good record which initiates business ideas.

fiscal record keeping in business ranging from the lowest business conditioning up to the complexmulti-national business, can not be overemphasize. It relates the internal business conditioning similar as programs, plan and finances as well asinter-business conditioning to the external world.

The applicability of record- keeping is statutory back by the provision of CAMA 1990, BOFID and other nonsupervisory pronouncement similar as SAS, GAAPetc.

still, fiscal record- keeping geared towardMicro-financing aspect, a necessary adjunct in business backing which provides an abecedarian check of trends in the former and recent development inmicro-activities in Nigeria.

The poor, to a lesser extent heavily reliance onmicro-finance and on special credit putatively seen in the support of the government and private sector enterprise to support small scale enterprises. The traditional fiscal system which to a large extent have supported the course have began to wane off lately due to conflict of interest between borrowers and lenders due to threat and query similar as death of borrower, lack of contributory security due to limited( or no) means and most importantly warrant or record- keeping( borrower) and track record of borrowing by lender( Haile 1998).

Mayeuax 1998) describemicro-finance as a contributing factor to the process of commission through enhancing worries productive and enabling them facing the challenges within the ménage. Bengston 1997 countries that micro backing for women aims to make micro backing enterprise more financially satisfying. This should contribute in not small measure to profitable commission within the family and in social and political spheres.( Bengston1997).

Not opposing as Cheston and Kutun( 2002) would seemicro-finance as a house- hold bank, have putatively reduce domestic violence and checkmate implicit rise in poverty hence, the bulk of substantiation and experience therefore seems to conclude that participation inmicro-finance have strengthen and improves family ties( relationship) and community uplift as members feel secured in his/ her capability to contribute productively to the frugality.

Micro-finance institutions have also supported in the area of organizing factory for growers, in introducing new area similar as crawler, rabbit, lawn- cutler, fish parenting. And other skill accession, cleaner timber, acclimatizing, electricaletc. and giving first hand knowledge to propel the business. At this juncture, micro backing can be regarded as an extension worker in field of fiscal backing to the frugality. In other word, they take service to the grassroots and as well nurture their growth.

Record keeping as regard tomicro-financing can not be sourced from the individual donors, as they’re multitudinous. Themicro-finance outlets( Banks) which have a first hand knowledge of the pool of conditioning information’s on record, challenges, the effect, effectiveness of the crusade conditioning to which this design work is narrowed in line becomes a subject of reference.

Statement Of Research Problem

In pointing out the problem of this veritably important task, the statement will allow the experimenter to pay further attention to the problem, and give him with a veritably close guidance or direction through out the study. The major problem of this study is thus to critically estimate the fiscal recording process and procedures inmicro-finance bank.

To resolve this problem, the study will also seek answers to the following specific questions.

Does fiscal record- keeping help to grease credit, savings and loan installations?

Does the type and degree of challenges facing fiscal recording system inmicro-finance banks have impact in the frugality?

Does the establishment ofmicro-finance banks have positive or negative impact in the frugality?

Objects Of The Study

As a result of the recent increase ofmicro-finance banks, it has come veritably important to find out their mode of operations, system of record- keeping and the effect on the weal of the people.

Hence, one of the objects of this study is to determine the interest cover rate by borrowers or cost of capital cover by ménage business.

The study will bring to light, what extent the poor millions seek credit installations from these fiscal institutions.

It’s also aimed at examining, if the incapability of the government to operate it fiscal institutions to full capacity is responsible for the poor frugality.

Eventually the study will unveil, if the transnational financial fund has correlation with the originalmicro-finance bank.

Thesis Of The Study

thesis is a conditional answer to a exploration questions awaiting validity.

expression of thesis using H0 and H1

H0 = ( Null thesis) – ive

H1 = ( Indispensable thesis) ive

thesis I

H0 fiscal record- keeping has no significant effect inmicro-finance bank.

H1 fiscal record- keeping has significant effect inmicro-financing.

H0 The interest rate ofmicro-finance banks has no significant impact inmicro-financing.

H1 The interest rate ofmicro-finance banks has significant impact inmicro-financing.

H0Micro-financing has no significant impact in the frugality.

H1Micro-financing has significant impact in the frugality.

Applicability And Significance Of The Study

This design is directed toward carousing to light those factors inmicro-financing that militate against the smooth handling ofmicro-finance bank.

This work will also serve as a force of knowledge for unborn researching scholars of the university, on how stylish to carry out exploration within a affiliated subject of study.

In the future, it’s stopgap that the finding and recommendation on this study will be of backing and benefits to both the existent, government, being entrepreneur, nor governmental association who play probative part to elevate poverty.

Compass Of The Study

Geographically, the compass of this study will be confined to Benin City. Edo State; this will show what’s also accessible in other countries in Nigeria.

The compass of this study will also be confined to the exploration questions of the exploration.

Limitations Of The Study

This study is limited by some useful information in the internet and in some other vital places.

As earlier refocused out, our major area of concern necessitates delivering information about recording process ofmicro-finance bank. In other to avoid going beyond the compass of the design, comprehensive and sensitive specialized issues similar as legal council ofmicro-finance bank would not be given in details base on the general sceptism ofmicro-finance assiduity in Nigeria and the public on information dispersion. The Bureaucracy of operation in confininginformation.This make primary data sourcing delicate. still, whatever similar problem is encountering, dependable secondary data collection will be employed.

Description Of Terms

It could be veritably important for me to define easily some of the terms used in the study to enable the anthology realize snappily what’s being written to avoid any controversial interpretation of languages or expressions.

NGOs Non Governmental Organization

Micro-Finance This can be described as the provision of credits, loans and other fiscal backing in small quantum to substantially low income capability to savings as well as considered unintentional and unfit to pay sale cost.

BOFID Bank and Other Financial Institution Decree.

CAMA Company and Allied Matters Act.

SAS Statement of Accounting Standard.

GAAP General Accepted Accounting Programme.

H0 Null thesis( Negative).

H1 Indispensable thesis( Positive).

Interest A price paid for the use of espoused finances over the term of the loan.