Microfinance provides people with access to small loans at more manageable interest rates, and can lead to self-sufficiency and better quality of life. There are many models of Microfinance.
Saving and borrowing are really different ways of turning small amounts of money into lump sums. Saving involves building a lump sum by first accumulating smaller amounts. Borrower is taking the lump sum first and then 'saving' afterwards in the form of loan repayments.
Microfinance can be defined as small loans that help people who wish to start or expand their small businesses but are not able to get banks to lend to them. Micro credit is the extension of small loans to entrepreneurs, who do not qualify for traditional bank loans. It is helping millions of people, especially rural women, with tiny loans so they can start small, create self-employment and improve their lives.
People save all the time, although mostly in informal ways. They invest in assets such as gold, jewelry etc and things that can be easily exchanged for cash.
Microfinance has proved to be a powerful instrument that enables the people |
