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These assumptions tend to be different than the assumptions an anthropologist or psychologist might use. A concept is a simplified representation of how two or more variables work together with one another. The purpose of a theory is to take a complex, real-world concern and simplify it right down to its essentials. If completed nicely, this enables the analyst to know the issue and any issues around it.

Subsequently, the operating cost of every transaction turns into fairly high for them despite of having excessive volume of transactions day by day. Small Mortgage Amount- Microfinance corporations present a small loan quantity to borrowers in contrast to the mainstream financial banks offering massive loans. The disbursement of giant loan amount is not possible in their case as they don’t ask for collateral safety towards the credit score. Microfinance was created concurrently by Bangladeshi social entrepreneur Mohammad Yunus, upon the creation of microcredit in 1983. Yunus established Grameen financial institution in Bangladesh in 12 months 1983, whose principal purpose was to supply small loans to entrepreneurs initially. Imaginative and prescient of Yusuf for microcredit was impressed when he saw women making bamboo stools in Bangladesh and incomes two cents a day.

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