What is the difference between microfinance and microcredit?
Microfinance is broader than microcredit and includes loans, savings, insurance, money transfers, and other financial products targeted at poor and low-income people.
Who do we target?
Microfinance services are usually aimed at economically active poor and low-income people, especially women, who have limited or no access to services from formal financial intermediaries.
Why has microfinance become so important?
Because it has been shown that when poor people have access to financial services, they can lift themselves out of poverty through successive investment, increased income, and improved household welfare.
How does microfinance help the poor?
It helps micro-entrepreneurs access working capital, build assets such as homes and livestock, reduce vulnerability, and instill a culture of hard work and saving.
Why cannot poor people just go to a bank?
Distance, high minimum balances, lack of traditional collateral, irregular income, limited loan history, paperwork barriers, and exclusion by formal institutions all make it difficult.