Level of study of the topic
Microfinance is often characterized by socially oriented activities in the financial services market. M. Jonah believed that small business development would solve the problem of poverty and social inequality. According to his concept, the main factor in repaying a loan for small business development is not the collateral for the loan, but the incentive for the entrepreneur to develop his business and survive in an aggressive external environment. It is a generally accepted fact that the founder of microfinance is Muhammad Yunus [3], and it is based on the mutual guarantee of debtors of the same social group. It was microcredit that served as a starting point for the fight against poverty and social stratification.
M. Yunus was the first practitioner-scientist who studied the theoretical and practical aspects of the microfinance mechanism, and later this topic was actively studied by many foreign scientists.
In particular, Sunny Li Sun, Hao Liang explores the interrelationship of globalization and microfinance. We know that concepts such as globalization and innovative economy are interrelated, and the study of the two without separating them is one of the important elements of a modern economic system.
Based on institutional logic, microfinance institutions incorporate both social and market logic in providing affordable microfinance loans. In particular, social logic is strengthened by the activity of non-governmental non-profit organizations in the field of greater social globalization and microfinance. Conversely, economic globalization is a catalyst for the market logic of microfinance institutions, resulting in a weaker or greater depending on the motives for maximizing the benefits of microfinance and the relative strength of real competition. The level of social globalization in the country is negatively related to the average interest rates on microfinance loans [4].
In the research of Afsheen Abrar, Iftekhar Hasan, Rezaul Kabir [5], he examines the relative importance of microfinance institutions both at the macro level (financial development, economic growth, income inequality and poverty) and at the micro level (efficiency of traditional commercial banks). The microfinance mechanism increases the total savings (total bank deposits) and loans (loans to the private sector) in the economy. Their participation increases economic well-being by reducing income inequality and poverty. In addition, their active participation helps to regulate traditional commercial banks by making them more competitive, and as a result, efficiency increases.
The development of microfinance, its impact on the innovative economy has been studied by many scientists through various research methods. Examples include Isabelle Pignatel, Hubert Tchakoute Tchuigoua [6], Frédéric Huybrechs, Johan Bastiaensen, Gert Van Hecken [7].
Microfinance institutions play an important role in financing the innovative economy. Innovations in various sectors and industries of the country are financed from the state budget, investments and bank loans. However, the volume of projects financed by non-bank microcredit organizations is small.
In order to finance innovations, banks and non-bank microcredit organizations themselves must be innovative. In the context of globalization, the competitiveness of microfinance institutions and the quality of their services also depend on their improvement.
In the modern literature, one can also observe views on the innovation of the economy as synonymous with the concepts of digitization.
According to a study by Thomas Mezenburg, there are three main components to the concept of digital economy:
1) infrastructure support (hardware and software, telecommunications, networks, etc.);
2) electronic business (conducting business and other business processes through computer networks);
3) e-commerce (distribution of products via the Internet). The digital transformation encompasses all aspects of human activity.
With the advent of digitalization of documents and electronic signatures, expanding the list and accelerating the delivery of public services to citizens, and the emergence of a digital state (e-government) that allows new tools for citizengovernment interaction, mass democracy is slowly replacing party democracy. Over the past 25 years, the level of services provided has become more sophisticated, combining previously distributed technologies and creating entirely new approaches to production processes and environmental management. Examples of integrated services are PLM-systems (Product lifecycle management (PLM)) - product / product life cycle management, BPM-systems (Business process management (BPM)) - business process management. Professors B.N. As Panshin [8] noted: “The main reason for the expansion of the digital segment of the economy is the growth of the transaction sector (services sector), which in developed countries accounts for more than 70% of GDP.”
These areas include public administration, consulting and information services, finance, wholesale and retail trade, as well as various utilities, personal and social services. The greater the level and dynamics of diversification of the economy, the greater the amount of unique data circulating inside and outside the country, and therefore more information traffic is generated within national economies. Therefore, the digital economy is operating effectively in markets with many participants and in markets with a high level of ICT services. First of all, it is related to Internet-connected industries (transport, trade, logistics, etc.), in which the share of the electronic segment is about 10 percent of GDP, more than 4 percent of employment, and these figures have a clear growth trend.
Table of Contents
- Introduction
- Research methodology
- Level of study of the topic
- Analysis and results
- Conclusion and recommendation
- References