Present in all parts of the world, microfinance can be seen as a key cog in the wheel which aims to provide financial inclusion in the form of affordable financial products, these products are not only limited to credit like personal loans and credit cards but also to in other products such as savings, fixed deposits, and other banking services. It is one of the ways in which all-around economic development can be achieved.
The most accepted and broad definition is one that defines microfinance as a micro-credit offered to the unemployed and those who get minimum wages as salaries. The institutions which participate in this system of microcredit are called microfinance companies.
What are the different type of loans that are given through Microfinance companies?
- women to increase their income generation
- loans for homegrown entrepreneurs
- emergency medical loans
- home improvement loans
- home extensions/ business improvement loans
It has been seen that now loans which are of a higher amount have been given to the groups that depend on microfinance companies. Even appliances like mobile phones which are essential for their business have been bought using loans from microfinance companies.