Microfinance

Microfinance is the provision of financial services to low-income clients with can include consumers and the self-employed.

Microfinance is generally refers to a movement that "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."

Those who promote microfinance generally believe that such access will help poor people to get out of poverty. As traditionally, banks have not provided financial services to clients with little or no cash income.

Microfinance may encompass any efforts to increase access to, or improve the quality of, financial services poor people currently use or could benefit from using. For example, poor people borrow from informal moneylenders and save with informal collectors.

Updated On: 09.10.04