Microfinance


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Microfinance is a general term to describe financial services to low-income individuals or to those who do not have access to typical banking services.
Microfinance is also the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services. While some studies indicate that microfinance can play a role in the battle against poverty, it is also recognized that is not always the appropriate method, and that it should never be seen as the only tool for ending poverty.
 
Microfinance is the supply of loans, savings, and other basic financial services to the poor. As these financial services usually involve small amounts of money - small loans, small savings, etc. - the term "microfinance" helps to differentiate these services from those which formal banks provide.
Why are they small? Someone who doesn't have a lot of money isn't likely to want or be able to take out a 50,000 loan, or be able to open a savings account with an opening balance of 1,000.


Friday, 08th Apr 2016, 08:55:38 PM

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