Microfinance in Asia and Africa: Difference between revisions
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'''Microfinance''' is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people. By helping them to accumulate usably large sums of money, this expands their choices and reduces the risks they face. As suggested by the name, most transactions involve small amounts of money, | '''Microfinance''' is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people. By helping them to accumulate usably large sums of money, this expands their choices and reduces the risks they face. As suggested by the name, most transactions involve small amounts of money, between US$100 and US$600. | ||
A few key principles of Microfinance are: | A few key principles of Microfinance are: | ||
Revision as of 15:40, 3 December 2007
Microfinance is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people. By helping them to accumulate usably large sums of money, this expands their choices and reduces the risks they face. As suggested by the name, most transactions involve small amounts of money, between US$100 and US$600.
A few key principles of Microfinance are:
- The poor need a variety of financial services, not just loans.
- Just like everyone else, poor people need a wide range of financial services that are convenient, flexible, and reasonably priced. Depending on their circumstances, poor people need not only credit, but also savings, cash transfers, and insurance.
- Microfinance is a powerful instrument against poverty.
- Access to sustainable financial services enables the poor to increase incomes, build assets, and reduce their vulnerability to external shocks. Microfinance allows poor households to move from everyday survival to planning for the future, investing in better nutrition, improved living conditions, and children’s health and education.
- Microfinance works best when it measures—and discloses—its performance.
- Accurate, standardized performance information is imperative, both financial information (e.g., interest rates, loan repayment, and cost recovery) and social information (e.g., number of clients reached and their poverty level). Donors, investors, banking supervisors, and customers need this information to judge their cost, risk, and return.
More key principles of microfinance can be found at CGAP Ayuktakh 13:02, 17 November 2007 (EST)
History of Microfinance
The Mechanics of Microfinance
Bangladesh
Social and Cultural Effects of Microfinance
Zimbabwe
