Around 2.7 billion people lack access to basic financial services. Without credit or savings, many people cannot get loans to start businesses or improve their living conditions. That's where microfinance comes in.
Microfinance provides access to credit which empowers people to invest in themselves and their future.
The smallest of loans can create income generating businesses, send children to school, buy medicine and nutritious food, or fix a leaky roof.
Loans, not aid
By providing fair loans instead of aid disbursements, microfinance institutions are a sustainable, long-term solution. Today’s microfinance is largely based on the Grameen Bank model, made famous by Nobel Prize winner Muhammad Yunus.
Local field officers work with small groups of borrowers where collective responsibility serves as collateral to safeguard the loans.
Filling the gap
Microfinance steps in where traditional banks are unwilling or unable to operate. Borrowers without collateral are not accepted by ordinary banks and the small loan amounts involved in microfinance offer banks insufficient returns.
Microfinance fills a gap in the market otherwise claimed by payday lenders.