Gaukhar Dauletbayeva,

Master of Science in International Finance Management,

Kostanay State University (Kazakhstan)

TYPES AND ORGANIZATIONAL FORMS OF

MICROFINANCE INSTITUTIONS

A pioneer in the field of development and systematic orientation strategy to stimulate development of the financial systems in developing countries is Germany [8, p . 249 ] . Adopted in 1994 and updated in 2004, the concept of development of the financial sector, which aims to develop the financial system as a whole, and not in its individual regions or individual target groups. More precisely, to stimulate the development of the financial system is defined as follows: " ... to contribute to its development in the partner countries is necessary to ensure on the one hand, sustainable growth and viability of the financial system, and the interaction of all its elements, on the other hand the development and establishment of financial institutions that are able to perform their functions." The concept of one of the ministries of Germany (BMZ) is a concept that is recognized internationally. According to this concept event on financial system reform introduced using various tools incentive depending on the complexity of the situation and at the same time on three levels (Tab. 1) [3, p . 9].

Macro level affects monetary function of the financial system. There is interaction between the macroeconomic policy of the state with its real economy. This communication reflects the relationship between real and financial parts of the economy. This level applies to the functional / political framework for financial institutions - as interest rate policy, banking law or regulation of the financial market, which have a strong impact on the volume and efficiency of financial institutions [5, p. 3].

Table 1

Mаcro-leve	Meso level	Micro-leve
Microfinance political consultations:	Stimulating the development of the microfinance network:	Microfinance institutions:
Сonsultations CB	Lobbing	Linking
Regulation and Control	Self-regulation	Upgrading
	Risk diversification	Downscaling
	Training, etc.	Greenfielding

Source: BMZ (2004): Sektorkonzept Finanzsystementwicklung, BMZ Konzepte Nr. 124, Bonn.

Meso is the central point for the development of the financial system and the financial sector includes institutions that offer such services to financial institutions, such as programs to improve the skills, trade unions / associations, programs to refinance and loan guarantee [4, p. 11].

When micro - or institutional level it is on the one hand the creation of various types and forms of organization of financial institutions that are competitive and efficient. On the other hand we are talking about the opening of the microcredit market for those segments of the population that are not serviced by domestic banks of the second level [2, p . 14].

In practice were developed three types of project Institution-Building, which should provide the poor mini and small loans on favorable terms to them . Krahnen and Schmidt developed the following classification of microfinance institutions (Fig. 1) [9, p . 86].

The first type of microfinance institutions is called «Downscaling», which stimulates already existing national commercial banks to expand the range of services for the "small" customers [19, p. 3]. Through the organization to promote the development of local banks provided funds to provide consulting services in the issuance of "small" loans and write-offs of the costs associated with the development of a new direction. In this case we are talking more about the transformation of the bank than loan funds [19, p. 27].

The basis of the second type, or "upscaling", is the transformation of NGOs into a formal bank through the provision of advisory services and professionalism. Thereby formed small specialized banks that focus on the poor as a target group [17, p . 4]. And here there are obstacles in relation to sustainable development and the survival of the organization , as on the one hand , there is no strict control on the part of investors [19, p . 27] and the lack of experience with other NGOs in the field of financing lead to a deficiency in the cost recovery and profit [12, p . 27].

Figure 1. Classification (s) of microfinance institutions*

*Source:: Krahnen, Schmidt (1994), S. 84, modifizierte eigene Darstellung

The next type combines the advantages of Up-und Downscaling, in the narrow sense of the poor achievement and long-term financial sustainability of MFIs . It is thus the formation of Microfinance-Bank (Starting from Scratch or greenfield banking).

At the heart of the so-called microfinance lies goal «Win-win», which argues as follows: MFI can both contribute to the fight against poverty and improving the welfare of the poor, and make a profit. Some authors believe that in order to achieve financial sustainability of MFIs need to commercialization of this sector [11, p . 617 ] .

Other authors do not see the relationship between commercialization banking IFI activities and welfare of the poor. However, some examples of successful implementation of the IFIs are in Bolivia, and today the microfinance market in this country is the most developed . Two strongest MFIs were formed by supporting NGOs and later converted into formal financial institutions [14, p . 12].

In addition, on the basis of classification and organization of procedures distinguish five basic organizational forms IFIs [10, p . 31]. The first four forms of MFIs are partnerships, " whose members are involved to varying degrees in the management process , making decisions on issues of ownership and control " [20 , p. 310 ] .

1) Savings and credit unions is the first model, which has its origins in Europe (late 19th c.) and showed positive results. Each member of the partnership is the owner constitutes the charter capital through contributions and contributions and receives income [6].

2) Members of solidarity groups get a bank loan or NGOs and guarantee its repayment. The advantage of this form is to reduce non-performing loans [13, p. 9].

3) "Rural banks' combine the first signs of the above two forms. Share capital is formed from both the members' savings and the refinancing of banks through deposits and investors. In addition, participants make decisions and take overall responsibility for the repayment of loans [1, p. 323].

4) Model "Linkage" is called "binding model," and it is based on existing informal groups [18, p . 97]. Thus, the model links the advantages of informal forms as proximity to customers, flexibility, poor achievement, with formal forms - the redistribution of risks, the use of long-term investment , the allocation of capital across regions and sectors . Feature of this model is the absence of linkages between specific individual participant and the bank, ie there is a connection only through the group [15, p . 25].

5) Microfinance banks ( MFB ) - formal financial institutions , which are regulated by specific banking regulation and which are under the supervision of the bank . Crucial moments of this concept can be attributed on the one hand the conclusion of loan agreements with individual customers, which increases the responsibility for the return of the last loan. On the other hand customers are paying for the use of the bank loan, the amount stipulated in the contract award [16, p. 134]. Thus, the MSE associated micro financing two objectives , namely " financial stability " and " achievement of the target group " [7 , p. 26].

6) According to a survey of international financial institutions IFPRI second, third and fourth degree form MFIs reach the target group of customers (people with low incomes) are much higher than savings and credit unions and microfinance banks [10, p. 35].

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