GRM 2010 GRM 2011

Abstract Details

 
AUTHOR NAME
 
Family Name:
JAN
 
First Name:
Muhammad Ibrar
 
ABSTRACT OF PAPER
 
Title of Paper:
An Evaluation of critical success factors and sustainablity of community development finance institutions in the UK
 
Paper Proposal Text :
Abstract of the Research

The economic depletion of the UK communities and the withdrawal of investment by the mainstream banks from these communities has become a source of social and financial exclusion. Consequently the concept of CDFIs has been introduced in the UK after the publication of Neighbourhood renewal strategy PAT 3 report in 2000, with the aim to tackle the problem of financial exclusion by providing easy access to the credit facilities to the micro, small and Medium enterprises (SMEs), Social and environmental enterprises on communities level.

During the last decade, a considerably fluctuation is recorded in the number of CDFIs in the UK and still many of them are not sustainable with out government support. But on the side of the picture, there are some CDFIs e.g Aston Reinvestment Trust (ART), Tridos bank etc which are more sustainable and fully operational with/or without government support.

So keeping in mind the success stories of CDFIs sector in the UK, the main aim of this research is design which will explore the influence of critical success factors on the sustainability of CDFIs. To further strengthen our main aim, we develop two more research objectives. Firstly we will identify the critical success factors of CDFIs; secondly we will establish that which of these critical success factors have influence on the sustainability of CDFIs.

We use mixed methodology in this research, means triangulation of research tools. In first instance we will identify the critical success factors by conducting interviews from the managers of the sustainable CDFIs. Then a detail questionnaire will be developed to test the influence of critical success factors on the sustainability of the CDFIs.


Although this research is in initial stage but it will have a wider impact on the sustainability of micro finance institutions (MFIs) and community development finance institutions’ in the gulf region, where access to finance for micro and SME’s is very challenging for example in a recent study the world bank have identified that the middle east and north Africa region have the highest collateral requirement against the loans in the world. Similarly on the other side the micro and SMEs use the credit facility of MFIs is the lowest in the world and the firms whose last application was rejected is again the highest in the world.

In addition, the MFIs sector in the Arab region is not well developed ((MIX and Sanabel, 2012) and used a conservative lending practices for the micro and start-ups businesses. Similarly a rare care is given to MFIs sustainability in the gulf region, as a consequence the rate of MFIs credit to micro and new start ups loans is 36.4% in the Arab region as compare to 56.5% in the rest of world. (Pedrosa G., J.A., 2013)

Therefore keeping in view the above points, it is evident that the gulf region can learn more from the UK experiences and can promote their MFIs sector which will lead them a high GDP growth of gulf countries, will increase the contribution of micro enterprises and SMEs in the GDP’s of the member states and will have a more sustainable MFIs sector in the region.


Key words:

Critical success factors, Microfinance Institutions, community development finance institutions, sustainability, Alternative finance institutions, Third sector organizations.


References

(1) MIX & Sanabel (2012) Middle East and North Africa Regional Snapshop. 2013
(2) Pedrosa G., J. A. (2013) Access to Finance by Small and Medium Enterprises in the Arab Region: Policy Considerations; UNO report.
 
 
 

WITH THE GENEROUS SUPPORT OF