Contribution of microfinance on women empowerment case study of Vision Finance company ltd Nyaruguru

CHAPTER TWO: LITERATURE REVIEW

This chapter of our research helped to discuss on the following points: the definition of key concepts, theoretical framework, and related literature

2.1. The definition of key concepts

2.1.1. Contribution

According to oxford dictionary contribution is gift or payment to a common fund or collection

According to merriam-webster.com/dictionary contribution is the act of giving something or something given:  donation

2.1.2. Microfinance

Microfinance is the provision of financial services to low-income clients, including women and the self- employed, who traditionally lack access to banking and related services. Microcredit, or microfinance, is banking the un-bankable, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient collateral. In general, banks are for people with money, not for people without.» (Gert van Maanen, (2004) is based on the premise that the poor have skills which remain unutilized or underutilized. Microcredit fits best to those with entrepreneurial capability and possibility. Ultimately, the goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance.

According to the RMF (Rwanda Microfinance Forum) (2002;6) is defined as development instrument by which populations excluded from the standard banking systems access decentralized financial services.

Therefore, microfinance programs generally target poor people who do not have access to classic banking and financial services to help them improve their financial situations. It enables poor people to meet them need for financial services and improve their standards of living. Financial services for the poor are the powerful instrument poverty reduction that enables the poor to build assets, increase incomes and reduce their vulnerability to economic stress.

2.1.3. Institutions

Institutions are "stable, valued, recurring patterns of behavior." As structures or mechanisms of social order, they govern the behavior of a set of individuals within a given community. Institutions are identified with a social purpose, transcending individuals and intentions by mediating the rules that govern living behavior.

The term "institution" commonly applies to a custom or behavior pattern important to a society, and to particular formal organizations of the government and public services. As structures and mechanisms of social order, institutions are a principal object of study in social sciences such as political science, anthropology, economics, and sociology (the latter described by Émile Durkheim as the "science of institutions, their genesis and their functioning"). Institutions are also a central concern for law, the formal mechanism for political rule-making and enforcement

According to Geoffrey M. Hodgson (2006) Institutions are the kinds of structures that matter most in the social realm: they make up the stuff of social life. The increasing acknowledgement of the role of institutions in social life involves there cognition that much of human interaction and activity is structured in terms of overt or implicit rules. Without doing much violence to the relevant literature, we may define institutions as systems of established and prevalent social rules that structure social interactions. Language, money, law, systems of weights and measures, table manners, and firms (and other organizations) are thus all institutions.