Financial exclusion and Lenders Option Borrowers Option: Difference between pages

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imported>Doug Williamson
(Create page. Source: FINCA webpage: https://finca.org/blogs/what-is-financial-exclusion/#:~:text=Financial%20exclusion%20refers%20to%20individuals,and%20other%20traditional%20banking%20services.)
 
imported>Doug Williamson
m (Link with Interest page.)
 
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''Financial services - inclusion.''
(LOBO).


Financially excluded individuals and populations are people who do not have access to traditional financial services.


A long term borrowing instrument with periodic interest re-fixings, which incorporates two linked options:


:<span style="color:#4B0082">'''''FINCA and financial exclusion'''''</span>
#An option for the lender to set revised (usually higher) interest rates at predetermined interest reset dates - for example annually. This is the Lender's option.
#A linked option for the borrower (exercisable only if the Lender’s option is exercised) either to pay the revised interest rate, or else to redeem the bond. This is the Borrower’s option. 


:"At the core of FINCA’s mission is alleviating poverty through financial inclusion.


:We work to aid those individuals and small businesses who are excluded by the formal financial sector.  
LOBOs have been issued for maturities of up to 50 years.


:With a network of community-based microfinance institutions and banks around the world, we provide access to financial services for previously excluded or 'unbanked' clients."
Each of the two embedded options can be complex to value with precision, potentially making the composite borrowing instrument difficult for some less sophisticated borrowers to evaluate.


:''FINCA webpage.''
 
Also written 'Lender's Option Borrower's Option'.




== See also ==
== See also ==
* [[Bank]]
* [[Interest]]
* [[Bank account]]
* [[Option]]
* [[Bank current account]]
* [[Basic bank account]]
* [[Cash management in Africa]]
* [[Credit creation]]
* [[Deposit account]]
* [[Employee]]
* [[FINCA]]
* [[Inclusion]]
* [[Microfinance]]
* [[Shadow banking]]
* [[Unbanked]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Long_term_funding]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]
[[Category:Technology]]

Latest revision as of 22:07, 7 October 2018

(LOBO).


A long term borrowing instrument with periodic interest re-fixings, which incorporates two linked options:

  1. An option for the lender to set revised (usually higher) interest rates at predetermined interest reset dates - for example annually. This is the Lender's option.
  2. A linked option for the borrower (exercisable only if the Lender’s option is exercised) either to pay the revised interest rate, or else to redeem the bond. This is the Borrower’s option.


LOBOs have been issued for maturities of up to 50 years.

Each of the two embedded options can be complex to value with precision, potentially making the composite borrowing instrument difficult for some less sophisticated borrowers to evaluate.


Also written 'Lender's Option Borrower's Option'.


See also

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