Microfinance

Microfinance

Microfinance is a financial service that provides small loans and other financial products to individuals and small businesses who typically lack access to traditional banking services. It aims to promote economic development and alleviate poverty by enabling entrepreneurs and low-income households to invest in income-generating activities, build assets, and manage financial risks. Microfinance institutions (MFIs) offer a range of services, including microcredit, savings accounts, insurance, and money transfers, tailored to the needs of underserved communities. The concept of microfinance gained prominence in the 1970s, largely attributed to the pioneering work of Muhammad Yunus and the Grameen Bank in Bangladesh. Since then, microfinance has evolved into a global movement, with MFIs operating in various forms, such as non-profit organizations, cooperatives, and commercial banks, across developing and developed countries. While microfinance has been praised for its potential to empower individuals and foster economic growth, it has also faced challenges and criticisms, such as concerns about high interest rates, over-indebtedness, and the need for more comprehensive poverty alleviation strategies

microloans, financial inclusion, poverty alleviation, entrepreneurship, economic development

— Robert Anderson

CITATION : "Robert Anderson. 'Microfinance.' Design+Encyclopedia. https://design-encyclopedia.com/define/microfinance?E=432212 (Accessed on October 14, 2026)"