Formal and Informal Institutions

While the spread of microcredit as a development practice has enabled borrowers in many developing countries to access credit, not all experiences with microcredit have been positive. The original model of microcredit lending was not effective in alleviating poverty. To remedy this, an “improved” lending model was introduced; however, this model, too, has failed the impoverished citizens of the developing world because of its exclusivity. Traditional microcredit loaning systems require some form of material collateral to ensure that a borrower will repay their loan. This excludes the ultra-poor due to their lack of possessions to use as collateral (Schurmann and Johnston 2009, 521). To solve this issue and provide the poorest citizens with

1. Brigham, Eugene F. and Michael C. Ehrhardt. Financial Management Theory and Practice, 13th Edition, Thompson South-Western, ISBN-13# 978-14390-7809-9, ISBN-10#1-4390-7809-2

Financial institutions are the most important institution in the development and financing the countries regardless of the developing countries, the countries has developed or is still underdeveloped. A large role in the country cause financial institutions must be sensitive and transparent in governance. However, not all financial institutions are banks. Financial institutions are included bank, finance companies, merchant bank, credit and leasing companies, national savings banks, co-operative bank, discount houses, factoring companies and so on. In addition, financial institutions can be classified into two which are depository and non-depository institutions. The common function among all these institutions is they were assigned to mobilize the fund from those who had fund to those who short of fund. So, we know that they were also known as financial intermediaries.

“It is a safe bet that change in financial market and financial institution will mark the discipline of finance over the foreseeable future and will produce new kind of institutions, markets and securities. (Fabozzi, 2002) Financial market and financial institution are playing more and more important roles in modern financial system. In general, a financial market is a mechanism for trading financial assets and securities in financial system. Financial assets are exchanged in financial markets. Financial intermediaries are institutions that channel funds from savers and depositors with cash surplus to people or organisations with cash shortage. The function of financial market and its classification, the effect of financial institutions, the role of financial intermediary and its category and government supervision in financial market and institutions are the four major parts in this essay.

Why are the vast majorities of deviant behaviors routine and institutionalized and so few are considered innovative or idiosyncratic? The Routine behaviors are more common than innovative; don't require abnormal amounts of psychological capacity or include deliberate exertion; little exertion/no broad arranging (Humphrey & Schmalleger, 2012 Institutionalized social orders are a sort of institution, even families can go about as establishments. However, for the most part, the expression "institutional conduct" is utilized for jails, mental healing centers, halfway houses, substantial companies, and government organizations. The issue with most institutional conduct is that it may be unseemly outside that establishment. Practices that are gainful

This document is authorized for use only in Financial Management23 by Dr. Raj, at Institute of Management Technology - Dubai from January 2015 to July 2015.

This week we read: Race, Class, and Gender, Unit III A: The Structure of Social Institutions: Work and Economic Transformation; Race, Class, gender, and Women’s Works; Seeing in 3D: A Race, Class, and Gender Lens on Economic Downturn; Racism in Toyland; Are Emily and Gregg More Employable Than Lakisha and Jamal?; Gender Matters, So Do Race and Class: Experiences of Gendered racism on the Wal-Mart Shop Floor. In these articles the authors are examining the interrelationship of work and the economic system and its interrelationship with other institutions, families, the state, education, and cultural through the intersecting dynamics of race, class, and gender.

Small businesses are generally regarded as the driving force of economic growth, job creation, and poverty reduction in developing countries. They have been the means through which accelerated economic growth and rapid industrialization have been achieved (Harris and Gibson, 2006; Sauser, 2005; Arinaitwe, 2002; Kiggundu, 2002; Monk,

Extensive research has determined that the banking industry is in an unstable state. The industry’s profits have

Financial Management as an academic discipline has undergone fundamental changes as regard its scope and coverage. In the earlier years, it was treated synonymously with the raising of funds. In the later years, its broader scope, included in addition to procurement of funds, efficient use of resources.

Financial institutions are key component to a functioning society in today’s day and age. The economic cycle depends on financial institutions to conduct transactions for its worldwide clients. These transactions can be as small as withdrawing money or applying for a loan to start up a new business. The employees of every financial institutions are the key to successfully providing these services to their customers.

Another major characteristic of microfinance is that they have numerous loans to informally-organised businesses which are often in small amounts over a short-term period with turnover of the aggregate loan portfolio maturing several times during the year. These are unsecure loans with simple repayment structure and documentation, but interest rates are generally higher than those in the formal sector (Anderson, 2002).

In this paper I will outline the fourteen financial terms and roles for the following words finance, efficient market, primary market, secondary market, risk, security, stock, bond, capital, debt, yield, rate of return, return on investment and cash flow and identify their roles in finance in today’s business world.

The banking industry has transformed in numerous ways through the ages. Financial institutions now offer a broader assortment of products and services than ever before. The banking industry’s principal purpose remains the same. Financial institutions put the public 's excess monies (deposits and investments) to work by loaning them to individuals to purchase dwellings and automobiles, to open and grow businesses, college funds for families with children, and for countless other reasons. Banks are essential to the wellbeing of our country 's economy. For millions of people residing in the United States, financial institutions are the primary election for saving, borrowing, and investing funds.

REFERENCES•Ross, S.A., Westerfield, R.W., Jaffe, J., Jordan, B.D. "Modern Financial Management". McGraw-Hill, Eighth Edition, (2008)•R.A. Brealey and S.C. Myers, "Principles of Corporate Finance", McGraw-Hill, Seventh Edition, (2003).