What is microfinance?

Microfinance is a type of financial service that provides small loans, savings accounts, and other financial products to low-income individuals or groups who typically lack access to traditional banking services. These services are designed to help individuals start or expand small businesses, improve their livelihoods, and build financial stability. Microfinance institutions often target marginalized populations, such as women, rural communities, and people living in poverty.

Microfinance is a type of financial service that provides small loans, savings, and other financial services to people and businesses that are often excluded from traditional financial systems. Microfinance institutions (MFIs) typically provide loans to low-income borrowers who may not have access to other sources of credit. These loans can be used for a variety of purposes, such as starting or expanding a business, covering medical expenses, or paying for education. Microfinance can also provide savings accounts, insurance, and other financial services to help low-income people manage their finances.

Microfinance is often considered to be a tool for poverty reduction and economic development. By providing access to financial services, microfinance can help people improve their livelihoods and build assets. Microfinance can also help to promote financial inclusion and empower women.