What is Microfinance?
Microfinance, also called microcredit, is a type of banking service that does not allow unemployed or low-income individuals or groups to access financial services.
- Microfinance is a banking service for unemployed or low-income individuals or groups who should not have second access to financial services.
- Microfinance allows people to obtain secured loans for small businesses and eligible loans in accordance with ethical lending methods.
- Most microfinance operations take place in developing countries such as Uganda, Indonesia, Serbia and Honduras.
- Like traditional lenders, MFIs charge interest on loans and maintain a specific repayment schedule.
- The World Bank estimates that more than 500 million people have benefited from microfinance.