Micro-credits are small loans (of a few hundred dollars) made to individuals or groups, and due for repayment after a short period of time, normally a year or less.
Lending to groups (particularly of women) is a very successful model in some parts of Asia where each group provides guarantees based on the solidarity of its members.
Micro-credits in general are extended for the financing of micro productive activities such as farming, commerce, handicrafts, food, and so on. There is minimal red tape when extending micro-credits and processing steps are quick and friendly. Administratively, however, micro-credits are labour-intensive; they can be geographically scattered over large areas and monitoring and recovery costs represent a large component of the interest charged by the micro-lenders. Lending rates vary between about 40 per cent and 100 per cent annually, depending on how they are presented.
The great success of micro-credits as financial tools of empowerment for many at the bottom of the pyramic (BOP) is underpinned by a very low level of losses. Equally significant is the fact that formal micro-lenders are in many countries subject to some form of formal government or financial consumer regulation, providing assurance that micro-clients will be treated with fairness and consideration.
These, in turn, place great value in their relationship with established micro-lenders since otherwise their source for credit would be informal street "curb" money lenders or loan sharks, who charge usurious day-lending rate
OverviewRecent ChangesYour WatchlistSearch Widget Definition of credit outlook A credit or rating outlook indicates the potential direction of a rating over the intermediate term, typically six months to two years. When determining a rating outlook, consideration is given to any changes in the economic and/or fundamental business conditions. An outlook is not necessarily a precursor of a rating change, and is often used to maintain the stability of long-term ratings. The outlook provides information to investors on the potential evolution of a rating, hence it increases the precision of the rating.
For rating agencies such as Moody’s, Fitch and Standard & Poor's, a positive outlook means that a rating may be raised. A negative means that a rating may be lowered, stable means that a rating is not likely to change and developing (or evolving) means that a rating may be raised or lowered
The United Nations' Clean Development Mechanism (CDM) scheme awards tradeable carbon credits to projects that reduce developing countries’ greenhouse gas emissions – such as wind farms, solar power, or the capture of methane.
Each carbon credit, known as a Certified Emission Reduction (CER), represents a tonne of carbon dioxide, or equivalent for other greenhouse gases, which is not emitted. In order to be awarded credits, project developers’ plans must be approved by the mechanism’s executive board, which has drawn up strict methodologies that projects must adhere to. Credits’ prices are determined by the market. They are volatile and currently sell for about $10 to $15. The price is heavily influenced by the European Union’s emissions trading scheme because companies can also buy CDM credits to fulfil their quotas
In finance and economics, a financial institution is an institution that provides financial services for its clients or members. One of the most important financial services provided by a financial institution is acting as a financial intermediary. Most financial institutions are regulated by the government.
Financial institutions provide services as intermediaries of financial markets. Broadly speaking, there are three major types of financial institutions: Depository institutions – deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies; Contractual institutions – insurance companies and pension funds Investment institutions – investment banks, underwriters, brokerage firms. Some experts see a trend toward homogenisation of financial institutions, meaning a tendency to invest in similar areas and have similar business strategies. A consequence of this might be fewer banks serving specific target groups, for example small-scale producers could be under served.
Standing Settlement Instructions (SSIs) are the agreements between two financial institutions which fix the receiving agents of each counterparty in ordinary trades of some type. These agreements allow traders to make faster trades since the time used to settle the receiving agents is conserved. Limiting the trader to an SSI also lowers the likelihood of a fraud. SSIs are used by financial institutions to facilitate fast and accurate cross-border payments.
Financial institutions in most countries operate in a heavily regulated environment because they are critical parts of countries' economies, due to economies' dependence on them to grow the money supply via fractional reserve lending. Regulatory structures differ in each country, but typically involve prudential regulation as well as consumer protection and market stability. Some countries have one consolidated agency that regulates all financial institutions while others have separate agencies for different types of institutions such as banks, insurance companies and brokers. Countries that have separate agencies include the United States, where the key governing bodies are the Federal Financial Institutions Examination Council (FFIEC), Office of the Comptroller of the Currency - National Banks, Federal Deposit Insurance Corporation (FDIC) State "non-member" banks, National Credit Union Administration (NCUA) - Credit Unions, Federal Reserve (Fed) - "member" Banks, Office of Thrift Supervision - National Savings & Loan Association, State governments each often regulate and charter financial institutions. Countries that have one consolidated financial regulator include: Norway with the Financial Supervisory Authority of Norway, Germany with Federal Financial Supervisory Authority and Russia with Central Bank of Russia. See also List of financial regulatory authorities by country.