Business Organization and Environment
Business Organization and Environment
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Business Organization and Environment
Available time 20 Minute(s)
01

Actenant

Business Organization and Environment
:
Available time 20 Minute(s)
01. Question
Level Hard
Maximum Mark 20
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Actenant in Brazil plays an important role in the Latin American microfinance sector. The bank issues working capital and loans to micro-entrepreneurs and small and mediumsized businesses. Besides this, it offers current accounts, savings, deposit accounts and insurance products to private individuals – many of whom find it difficult to gain support from traditional commercial banks.

In 2014 Actenant’s profit margin fell to under 1% and 12% of its loans to small businesses had not been repaid within one month of the required date; and 61% of its customers had also taken out loans with other banks.

Key Indicators for Actenant at year-end 2013:

  • number of loan clients: over 400000
  • percentage female clients: 55%
  • percentage rural clients: 23%
  • average loan amount: $2800

(a). Describe two features of the microfinance loans provided by Actenant

[Marks: 4]

(b). Explain two advantages of microfinance to small businesses in a country such as Brazil. 

[Marks: 4]

(c). Assess why microfinance providers such as Actenant might struggle to be profitable.

[Marks: 10]
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