All for Joomla All for Webmasters

Microfinance: What is it?


What is microfinance?

Microfinance involves financing which provides access to small loans (micro - credit) for low income families in order to ensure the commencement of business or maintaining current business activities for family members incomes. Microfinance is a sustainable model of crediting that should meet the financial needs of the poor and marginalized segments of society. The importance of Micro - credit was highlighted in 1970 through the efforts of Muhammad Jonus, microfinance pioneer and founder of the Grameen Bank in Bangladesh. His efforts to create economic and social development of societies through microfinance got its recognition with the Nobel Prize in 2006.

What is а microfinance institution?

Microfinance institution (MFI) is an organization that provides financial services for low income families. Although every microfinance organization is different, all microfinance organizations share a common feature in terms of providing financial services to a clientele that is vulnerable and considerably more marginalized from classical banking clientele

Why the focus is on women borrowers?

In order for economies to grow and thrive, women must be included in each level. All these is particularly true in many developing countries where women constitute the majority of poverty, unemployment and social and economic marginalization. Research shows that women tend to invest the money they earn to their families, education and households which over time are strengthening  and stabilizing the social and economic aspects of their communities.

Why loans include interest?

The inclusion of the interest is only necessary to create a financing, sustainable and viable credit program that will continue to generate more capital in order to enable more people to have access to credit.


We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…