Journal of Modern Accounting and Auditing, ISSN 1548-6583 September 2011, Vol. 7, No. 9, - Marketing and Financial Aspects With Micro Credit and Turkey Sample Turgut Özkan, Güzide Öncü Eroğlu Pektaş, Merve Eseoğlu Halic University, Istanbul, Turkey The main targets set for economic growth in the World Bank s 1990 report is to provide a permanent and sustainable poverty eradication strategies on the development. Used for this purpose today, the most effective strategy comes at the beginning of micro-credit system. Microcredit, in particular in the area of the individuals, and its opportunities to increase the credit to the users of the production process and ensure active participation in the society starting from the women s economic initiatives, but it cannot be considered as a micro-economic factors in the economy to facilitate an effective financial mechanism. Many studies in the literature have revealed that women s contribution to family income of households in poverty has created an important support. In addition, micro-credit system encourages women to create their own jobs, as the GNP (Gross National Product) of the countries contribution to increase employment opportunities. There are opinions arguing that, making use of the contact with communities in the potential female workforce satisfactory for women to create job opportunities to gain income is able to provide initial capital to the existing banking system, because in many countries negative socio-cultural conditions, competing with men is much difficult. Micro-credit system, in the respect of changing countries socio-cultural and socio-economic structures is an important contribution. Microfinance occurred in recent years by rapid developments in Turkey since 2000, progress has been very professional. Our work in the field of micro-finance started operations in 2002, the Evaluation of Women s Work Association of Business Economics and the Grameen Bank realized Maya model adapted for Waste Prevention Foundation of Turkey should apply micro-finance. Micro-finance practices in the world and Turkey also compared practices. Turkey s application of micro-finance in banks credit policies that support marketing activities related to marketing and sales strategies was examined by size. Also, emerging areas in Turkey, especially in the south-east region, the application of micro-finance loans contributed to the development of this geographical area were assessed. Studies of marketing and financial aspects of micro-finance were examined, the economic dimension of these practices by the country s social, cultural, political development has also been found to contribute significantly. Keywords: Micro-finance, Marketing, Banking, Customer Relationship Management. Introduction Economics professor Muhammed Yunus who was born in Bangladesh in the 1970 formed the fundamentals of micro-credit system. Grameen Foundation and later converted to the bank with the Foundation was established in 1976, the system s implementation of Grameen bank has been successful in other countries. Turgut Özkan, Ph.D., Associate Professor, Business Administration Faculty, Halic University. Güzide Öncü Eroğlu Pektaş, Ph.D., Assistant Professor, Business Administration Faculty, Halic University. Merve Eseoğlu, Research Assistant, Business Administration Faculty, Halic University.
2 MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE The system s founder, Muhammed Yunus was awarded the Nobel Peace Prize in 2006 and proclaimed by Time magazine as change the world one of the 10 ideas. The reason for an economics professor from a less developed country to win the Nobel Peace Prize and make the underlying fundamental, is the contribution to provide women of poor and especially in poor countries and socio-cultural, with micro-credit system through the channel of production. Because of the system, nearly a quarter of the world s populations live below the poverty line believe the fact that global poverty can be effectively fought with this tool, for the system seems to be capable enough to grow up quickly. System is based on the person s statement and documents, it does not require collateral or guarantees, debt payments and court enforcement are not due. According to Muhammed Yunus, the classic feature of the bank system is doing the opposite of what the rules are meant to create. Systems, credit, income and assets are seen as the primary human right. The striking feature of the system of micro-credit is that it is provided in 175 countries around the world has reached 600 million women. In our study, Turkey was chosen as the example of micro-credit system is because terrorism, unemployment and poverty are widespread and exposed in this country since 1983, and the distribution of income of the local people in eastern provinces is in the lowest share to support their diets. In Turkey, micro-credit system was initiated in 2003, and the project has an important function in eliminating poverty and drawn women into the labor force. Micro-credit system, banks in Turkey and some of the funds, foundations are available through the channel of 67 branches in 46 cities. Micro-payment system in Turkey is quite a wide application area, to find more important matters of the system, especially when terrorism were widespread in the area of south-eastern provinces, the socio-economic contributions as well as socio-cultural and more importantly, socio-political structure of the unitary state may change in favor. Today, over 36 thousand women in Turkey have met the micro-credit system, which is one of the main sources of terrorist movements, in the Diyarbakir province has reached 10,400 women in vicinity. This study, micro-credit system of global poverty have implications to identify the system through the channel in the world and especially in the developing and underdeveloped countries, real and correct the income distribution injustice and analyze the subject of how to contribute in the women workforce in terms of socio-economic and socio-cultural impact. At the same time, in particular Turkey s micro-credit practices examples with the movement, the democratic system, non-regional and ethnic claims based on terrorist movements within the system to the withdrawal in the micro-finance tool used by the importance is to reveal. Thus the study of literature will bring a different perspective to the debate and is expected to contribute. The second part of our study, micro-credit system for more applications in different countries, including application problems and propose solutions to the literature are divided. In the third section on micro-credit system to play a role in the development of the country is discussed briefly. The fourth section discusses about the great importance for a large poor and female labor force in the world and in Turkey of applying marketing techniques to spread micro-credit system in the growth, and the fact that Turkey and other countries implemented marketing strategies in the movement. The fifth section discusses about the influences of Turkey to assess the system s micro-credit practices, particularly east and south-eastern regions of Turkey to the socio-economic and socio-cultural are putting forward. In the sixth section, the existing data, findings and alternatives in the light micro-credit system in the future work are discussed, and results are published.
MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE 3 Literature Review Micro-credit in the rapid increase in the number of theoretical and empirical work is seen. In almost all regions of the world, finds and applications seems to focus on micro-lending, especially in developing countries and countries in lagging regions has the potential to create growth. The increasing importance of the subject and practices that create brilliant results in this field has led many academics to concentration. Most empirical studies of this nature include various regions of the world as an important research and development of micro-credit subjects are qualifications that will allow comparison application. Barboza and Trejos (2009) studied Mexico s villages and towns of the region Chiapas, including 2,151 participants of the micro credit system, and Mexico s performance was analyzed. They concluded that micro-credit system still has high transaction costs, however, it has an important function to eliminate the negative effects of poverty in the region, and contribute to restoration of commercial viability. Madichie and Nkamnebe (2010) Eastern Nigeria da micro-credit system exploits the small commercial business dealing with (petty traders) women with empirical studies, women of the region s socio-cultural constraints over efforts to micro credit system, a good basis for the evaluation have been described. Climb to the top rung of the pyramid when the system comes a desire to improve and he defended the effort. Nigeria s Ninna in micro-credit that 232 households which investigated Olatunji (2010), the young entrepreneurs of various commercial and production areas operate their system take advantage of most people s work continues not to the location to come, but an important investor category, climbing to achieve the ones found has emphasized. Fatima (2009) in Pakistan live in rural areas with poor women, how much of the micro finance system to take advantage achieved could be searched, socio-economic and cultural history, age and marital status of borrowing a significant impact that the result reached. In this issue of women s education programs are encouraged for connecting implementation of the government should seriously suggested. There are a large number of studies in micro-credit in India. Veerashekharappa (1996) and Jha (2000) found that micro-credit system, poor people an effective credit system has to offer defended, Sharma (2010) found that in the last three years in India, micro-credit area of 50%-70% at the rate of growth that established micro-finance have a good network infrastructure that creates institutes, despite all these positive developments, the system can not yet reached sufficient size and still has some problems, it requires the support of government s state to create the momentum. Ghazali (2003) Malaysia yi in studies involving the concept of micro credit and social capital in rural communities and especially women s contributions to the development of countries of great importance in terms of provision was suggested. Chavan and Ramakumar (2002) practiced in some developing countries analyzed in the study of the system that allows an incremental development and limited use of technology as he defended the increase. A study with similar results was made by Storey (2004). In addition to these studies in developed countries and relatively undeveloped regions of the country with the aim of the development of micro-credit system is applied in the empirical research that has examined. Nieto (2006) Spain s micro-credit practices with other countries than had Russo and Tencati (2009) Corporate Social Responsibility (CSR) concept in the context of other funding methods and micro-loan applications than they both systems, especially in marketing important approach to diversity is posited. It is possible to see the similar
4 MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE results the empirical studies of Rashid, Sharma, and Zeller (2004). In addition, the micro-credit field studies are intended to contribute the micro-credit system of Rogaly (1996), the marketing organization of Joshi (2004) organization, and Elahi and Rahman (2006). Effects on Micro Credit System Development Micro-credit and macro-scale approach to development, experienced in development strategies as a result of the failure has emerged. Necessary development in the way of trying to move countries and both their support for these applications that the IMF and World Bank as institutions, the whole economy of the targeted large-scale development strategies in general in the economy fast and painful changes envisaged prescriptions desired results reached cannot, the countries in question and institutions effects of these policies to question pushed. Indeed, in 1951, a report published by the United Nations, the rapid economic growth in the economy will be largely done cannot be achieved without consideration of painful adjustments are indicated. These reasons, which directly support development, the search for alternative policy towards the goals set have been noted. Macro scale, an overall development policy can be copied to many countries, development in the way of choice as a submission and the program a total development and conclusion of waiting, many less developed countries, country facts in the foreground can be prepared and direct society s poorest sectors of the economy will give micro loans to new policies to assess began. So far the current financial system in the organizations credit the opportunity to have non-poor are direct credit support to ensure they start their own businesses to allow, and thus the fight against poverty is also of the development is triggered, the micro credit system, an efficient economic instruments in widespread use have increased. In this field, successful practices and poor living standards of the observed improvements in World Bank, IMF and United Nations organizations such as the developed countries, micro credit and micro finance programs directly to support it, as even this system of self development programs, part of the state also introduced. Development issues were examined micro-credit system where two different approaches are noteworthy: corporate approach and welfare approach. Supported by institutional approach, the poorest segments of the credit facility to be followed in attaining the best method to serve this purpose in that country in the formal structure of financial institutions to increase the number. The increase in the number of financial institutions and more poor people benefit from this system will ensure that the poorest people in society as well as easier to achieve. The most obvious examples of this approach in Indonesia and in Bolivia, Banco Solidario Bank Rakyad form. Welfare approach advocates the micro credit system based on institutions rather than society s poorest people how to be reached, their self-sufficient, how bringing move and institutional micro-credit system to a commercial to make what they advocate. According to them, the main objective of micro-credit system as possible to reach more poor people and to give these people the economy. Micro Credit Marketing Especially until recently, commercial banks have lower income groups of the loans behind in payments fail will in the direction beliefs, as well as small loans transaction costs height of the poorest segments of the credit demand, while financial collateral fail, and in some areas of socio-economic and cultural barriers have various reasons, micro-credit system, distance However, in recent years, some micro-credit institutions and banks healing or some of the banks in their
MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE 5 own micro-credit departments to establish or one set of banks existing micro credit institutions to invest in between Citibank, ABN, AMRO, HSBC, like banks, including nearly 225 bank s micro credit sector activity was determined. (Review of Commercial Bank and Other Formal Financial Institution Participation in Microfinance) Private banks as well as state banks also sought the sectors directly to enter the preferred banks, in their own, but management employees, a different organizational structure of targeted products, an independent micro-loan volume set are. By this unit to improve the revenue expenditure of the related units only, depending on where the bank is usually unable to make any income transfer. The applications of this kind without established an independent unit, usually carry out banking activities of bank employees in this process with different micro-credit has to be able to comprehend the situation, they can adapt and be able to show the full treatment is quite difficult. Some micro-credit transactions of individuals in managerial positions as second-class work to see that this has deeply influenced the success of banks in the sector. As a good example, in Ecuador 23 years in the field of micro-credit activities, although there is an active member of the Banco del Pacifico be given the number 4000. (Microfinance Matters) Micro-credit applications and the poverty line live below the households themselves an adequate income to the level of permanent access to help, while successful applications, even such continuity might prevent the risk factors and presence are highlighted. (Micro-insurance: The Next Revolution) Individuals who benefit from loans with a variety of health reasons to stay away from work for a while because of death or permanent inability to continue business applications during the highest risk factors are encountered. This addition to various natural disasters due or on any defects without emerging external factors because of the more agricultural areas shown on the product of part or all of the serious damage and significant risk among. Like this, developing countries more than the observed male dominance as a result of the family acquired valuable assets, the men will be over and divorce women suddenly such movable and immovable property of deprived of that was caused by significant mind are available. Again, the repayment of loans obtained outstanding achievements in the process, although in many applications for this process appears to be some risks that are feeling the disposal requirements. Specifically the reasons credit s poorest individuals negative financial responsibility encounter led to avoid some of micro-credit institutions (SEWA, BRAC, cups, etc.) given the risks to compensate for the low-cost, voluntary-based insurance products developed, and their customers to offer start is known. (Small Enterprise Development) Nowadays, many micro-credit institutions, they update the services are specifically focused on women. Indeed, micro-credit institutions to evaluate the 32 largest research, these organizations are composed of 80% of women revealed their customers. That is why women micro-credit institutions are the primary customers for both companies as well as to achieve the intended objectives in terms of evaluation approaches will be more accurate. Cases reach the intended objectives in terms approached first in the world of the working population of about 50% by women paid 10% of that they have, and only the total assets of 1%, holding the truth and are encountered. (Microfinance Perils and Prospects) Those of us out there the same kind of performing work within the home almost all the work of the load of women that work for it right and not received, in many cases, the work done economically as he never returns do not provide shows. In this situation of women in society than men less income they have, women s labor economically adequate assessment cannot be, women and men in the same work are paid wages differ in that, the society and even lived within even more pressure is exposed to such. In this perspective, when micro-credit organizations primary customer of the women be chosen from
6 MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE both society s poorest sectors to reach the purpose of better serving both labor economic evaluation cannot be women s economic growth and development to contribute is provided. On the other hand, micro-credit institutions because women are primarily customer base included in the points where the relevant organizations evaluated when we face the first cause of women than men receive their loans repayments regard are more reliable that is the reality. (International Journal of Social Economics) Indeed, a study of men owe 15.3% of the cases back payment of the loans while they are having difficulty in women, this rate only 1.3% in remains. Of women to men than the naturally more gentle-natured, social sanctions to be more sensitive and where they are more connected to act, the credit issuer s repayment terms of less risk taking provides. (Pathways out of Povertry) Moreover, all these features much more cautious in the use of women to credit leads, often choose to work in areas close to their homes of micro-credit organization with lower costs of credit monitoring makes it easy to follow. Micro Credit Application and Turkey Sample In Turkey, first applied in the field of micro-credit, Evaluating Women s Work Foundation which was established in 1999 by Maya economic support enterprises with the impact of earthquake disasters was launched in 2002 in Kocaeli. In fact, the starting earlier in the limited number of pilot areas in 1991 to women micro-credit allocation by 1995 in 1997 between the system in Turkey, of how the increment of smaller applications were made and these applications increased 98% upcoming rate loans of recycling is provided to test the actual project site to exceed one. Will be held in the project, the labor of women with small loans to be injected from the outside of the yeast can be almost economical means of income generation activities in the conversions been aimed at ensuring the project was appropriate to give the name of the yeast. If we talk about some of the established system, primarily in yeast applied just as the micro-credit as well as many other world applications from members and the application is not requesting any financial security system based on the majority group is observed. Maya s loan application, evaluation, approval and monitoring of the short loan all existing processes credit demand that each woman separately take interest as a principle which was adopted and thereby established a warm relationship with the help back the loan payments on time is aimed. Maya s customer profile, the small-scale work or this kind of business you want to start the women create women entrepreneurs an important part of their work from their homes executes, applicants, some among the domestic cotton, countertop jewelry selling, pazarcilik/bohcacilik (they are the special Turkish individual businesses) made, tailor shop. Generally be characterized as low income within income groups in these women, improve their business, to purchase fixed assets or businesses with the aim of the various cost factors are applied to micro-credit. Such credit users, banks and collateral satisfies the conditions could not formal banking system offered by the loan amount below the amount needed and they workers, civil servants, such as a registered office work did not like the reasons banks use credit cannot. Evaluating Women s Work Foundation which created the Maya Micro Economic Support Operations once sustained in the Marmara region, as well as micro-finance application, another application is carried out in the Diyarbakir region. The project Turkey Grameen Microcredit Project under the title on June 11, 2003 has been implemented. Waste Prevention Foundation of Turkey, Diyarbakir Governor s Office and conducted in collaboration with Grameen Trust, the project received from various individuals and institutions that support and donations started to operate. In Diyarbakir target micro finance, as well as application of the Marmara region, outside the traditional
MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE 7 banking system is poor. As in the Marmara region, which in practice is based on the group. Project is seen as dense urban centers of poverty and poor living in rural areas and arable land does not have an agricultural credit facilities are provided to women. So as to support women s entrepreneurship on the one hand, while her other hand, the family and social status in the society contributes to the development. Interviews with users in the region based on micro-credit can be said that, especially for loan repayments of loans held weekly meetings, users come together to win this cultural groups are not. Also borrow a position to women in a given week training, thanks to read-illiterate individuals by their names to write teaching is, and they succeed the way of unity, courage, hard work and discipline issues such as seminars are provided. Thus, these meetings a week held back the loan payments are only to be places far beyond that, as social facilities. Repayments at 46 weeks of completion of the system is scheduled weekly basis, success is considered as one of the most basic items. Because I do not have any regular income of the lower income groups is very high marginal propensity to consume, that the amount of expenditure will be higher than normal income individuals. City micro-finance application, for individuals fundamental credit enterprise credit and interventionist individual credits to be three different types of credit products are offered. Basic Credit: Credit application of low-income individuals who want to exploit, for any economic activity that will bring in revenue for the group based on the type of loan is the most common. Entrepreneur Credit: Basic loan areas between commercial potential, showing success in the way of important steps have and it has proven credit users, the first year, each year the amount of the 1000 TL by increasing the loan type. Individual intrusive Credit: Main Street and demanded money from other people in the streets and maintain the livelihood of the poor in the extreme that is the type of loans to individuals identified. Given without distinction between men and women in this type of loan to be paid back, and it s time to pay back the loan amount is determined by the individual fighter. Given between 50 and 100 for this credit, a refund in the event of a successful completion rate increased by 100% will be renewed through. City micro-finance project, the application process began in July 2003 to the present, the use of loans concentrated in areas around an average of seven sectors. Looking at these distributions, distributed more than a quarter of the loans in the shop are used within the framework of the activities undertaken. Again, the use of credit in terms of processing and manufacturing activities, business activities and trade-weighted, has a significant share of domestic animal breeding. Carried out activities in the services sector with a total hawk, while declining in relative importance in the agricultural activities sector loans at least they are directed. Approximately 4500 individuals from 2003 to the present beneficiaries of the system, amounting to 5,589,983 so far behind in payments of credit and loans distributed 100% success were achieved. Discussions and Conclusions Poverty alleviation, development and ensuring inter-regional economic disparities elimination of women s family and community in the status of strengthening the rural areas of the city toward the immigration reduction, and many more contemporary socio-economic problem in the analysis of various countries by the global plans will support the implementation of the micro credit system today. In contrast to macro-development plans, for individuals as he aims to win the economic life of the system, also serves the purpose of increasing employment. The system time with the development of needy products offered diversification and the system micro-insurance of such services in addition to the current state of social
8 MARKETING AND FINANCIAL ASPECTS WITH MICRO-CREDIT AND TURKEY SAMPLE security institutions in scope to not obtaining individual a social security achieved is provided. Also sometimes the crisis and other economic events, because poor individuals income that may occur with fluctuations disposal for the purpose as the available micro-credit system, so that these individuals achieve their income level, a certain amount of stability to be captured that is helping. This addition to the individual to the state or others from addiction recovery practice group that based payment methods, community self-reliant, entrepreneurial spirit bearing the number of individuals to increase success, desire to strengthen, living in the country and the society at peace with people s increasing leads. In addition to all this, the vitality brought to the country s financial sector, civil society organizations, relevant public institutions and the banking sector with the cooperation established between the new entities to prepare the ground system can be evaluated among other important positive effects. References Barboza, G., & Trejos, S. (2009). Micro credit in Chiapas, México: Poverty reduction through group lending. Journal of Business Ethics, 88, 283-299. Chavan, P., & Ramakumar, R. (2002). Micro-credit and rural poverty: An analysis of empirical evidence. Economic and Political Weekly, 37(10), 955-965. Elahi, K. Q., & Rahman, M. L. (2006). Micro-credit and micro-finance: Function and conceptual differences. Development in Practice, 16(5), 476-483. Fatima, A. (2009). Socio-economic constraints to demand for borrowing among rural females of Pakistan. International Journal of Social Economics, 36(11), 1050-1070. Ghazali, S. (2003). Kut (informal rotating credit) in the livelihood strategies of urban households in Penang, Malaysia. The Royal Geographical Society, 35(2), 183-194. Jha, A. K. (2000). Lending to the poor: Designs for credit. Economic and Political Weekly, 35(8/9), 606-609. Joshi, D. P. (2004). Review: Organization of micro-finance. Economic and political Weekly, 39(14/15), 1475-1476. Madichie, N. O., & Nkamnebe, A. D. (2010). Micro-credit for microenterprises? A study of women petty traders in Eastern Nigeria. Gender in Management: An International Journal, 25(4), 301-319. Nieto, B. G. (2006). Micro-credit in Spain: A comparison with the southern approach. Development in Practice, 16(5), 490-497. Olatunji, I. A. (2010). Medium-term property rights and urban poverty in Minna. International Journal of Housing Markets and Analysis, 3(3), 256-269. Rashid, S., Sharma, M., & Zeller, M. (2004). Micro-lending for small farmers in Bangladesh: Does it affect farm households land allocation decision? The Journal of Developing Areas, 37(2), 13-29. Rogaly, B. (1996). Micro-finance evangelism, destitute women, and the hard selling of a new anti-poverty formula. Development in Practice, 6(2), 100-112. Russo, A., & Tencati, A. (2009). Formal vs. informal CSR strategies: Evidence from Italian micro, small, medium-sized, and large firms. Journal of Business Ethics, 85(2), 339-353. Sharma, E. K. (2010). Microfinance players must innovate, recall social goals, the sector s rapid growth has not meant that the financially excluded are better off. Retrieved from http://www.highbeam.com/doc/1p2-25460047.html Storey, D. J. (2004). Racial and gender discrimination in the micro firms credit market? Evidence from Trinidad and Tobago. Small Business Economics, 23(5), 401-422. Veerashekharappa, H. (1996). Rural credit in VIP districts: A study in Uttar Pradesh. Economic and Political Weekly, 31(39), A123-A130.