Microfinance

Poor people in rural areas often cannot get banking services. Banks are not interested in poor people and, generally do not provide very small loans because administrative costs are too high. Microfinance provides poor people with a way to build savings and work toward becoming part of a country’s official financial system. The main idea is to provide extremely poor people with small loans so they can start and operate a business. The borrowers are able to save money and pay back the loan over time.

Microfinance is a method that helps provide low-income people with the financial services they need to improve their lives. Organizations around the world are showing how microfinance methods can help lift poor people out of poverty. Microfinance services help low income people to reduce risk, improve business management, raise productivity, obtain higher returns on investments, increase their incomes, and thus increase the quality of their lives.

           Microfinance helps support financial security because it is not just a donation. The idea behind microfinance is to empower borrowers by helping them build a business which can create income and grow.