Sharone Perlstein Microfinance BlogLearn about the history and development of microfinance and how low-income earners are able to grow their businesses with small loans with lower interest payments. Go to Blog
The Roots of Microfinance
Microfinance may have taken off in the 20th Century, but it has been around as a concept for hundreds of years. The first record of loans being granted to low-income groups was in the 18th century with the Irish Loan Fund system, which was introduced in order to offer low income earners in Ireland better conditions and a brighter future.
For the most part, a microfinance loan is used to support a small business, or help a person with a low-income start an independent freelance business. Microfinance loans are often available to individuals and groups who would not otherwise have access to traditional banking channels and would probably not be approved for a loan by a traditional lending institution. The amounts that are lent vary by social and financial context, loans granted in rural areas and in underdeveloped nations for instance, are usually smaller than those provided in central and developed areas. Though repayments include interest, they are often cleverly structured so as not to financially burden, or pose unnecessary risk to the client. The interest rates on micro loans are typically lower than traditional loans.
Facts and Figures
With recorded repayment rates of approximately 98.9% in 2016, microfinance loans are at the top when it comes to loan repayment rates. The International Finance Corporation (IFC) reports that over 130 million people have benefited from microfinance operations in some of the poorest nations of the world. The IFC has supported the development of microfinance operations in developing nations by providing improvements to credit reporting bureaus and promoting firmer regulations and governance for micro lenders.
It’s More Than Lending
Microfinance and micro lending continue to grow and evolve as the needs of potential borrowers change. Today, some microfinance organizations also offer insurance and bank accounts to help build their customer base and improve the lives and businesses of their growing clientele.
While not every person who has a low-income is eligible for a micro loan, microfinance definitely presents greater manageable financing options to millions of people in need of designated financial assistance.
Read about Microfinance from around the world by Sharone as he explores Microfinance and it’s effect on thousand of lives around the globe.
From The Press
The microfinance sector is rapidly expanding especially in developing nations. At a summit in India on the challenges and opportunities faced by microfinance and fintech companies operating in this space, several key areas were identified as challenges: 1. Financial...read more
Growth in the Fintech industry is exponential, every day there are new providers, solutions and products in this sector. From financial software to enterprise level organization and structures, fintech products and solutions are everywhere. Markets and Market report...read more
The International Finance Corporation (IFC), the lending division for the private sector of the World Bank, doubled their investment in India in 2017. This investment will inform the division’s strategy moving forward. Investing in India – A Success Story The IFC has...read more
While the debate surrounding equal pay for women continues to make headlines around the world, there are still over 1 billion women who have no access to any type of formal financial services. Correcting this type of discrimination against women is the foundation to...read more
Pakistan Proves to be Fertile Ground Mobile banking, also known as branchless banking, is proving to be a huge success in Pakistan. Estimates are that by 2020, the market will grow from today’s 2% to 35%. The popularity of the platform and huge potential for growth...read more
Is Fintech Opening The Financial Markets up to Risk? The Financial Stability Review (SFR) this year saw the Central Bank Monetary Authority of Singapore (MAS) highlight potential consequences of fintech innovations. Known as a country with lenient regulations and...read more
Because of the significant role played by the settlement department in any big company, it is vital that it is given the support required to maintain the company’s credit rating, risk rating, solvency and cash flow. Through technological advances, corporate tasks are...read more
Africa faces seemingly insurmountable challenges. There are civil wars, terrorism, disease, drought, famine, and poverty. Yet, in the midst of all this lack, there is amazing potential for socio-economic recovery. Mobile Phones are an Important Link Mobile phones...read more
Bandhan began as a small economic non-profit in West Bengal, India. Its mission: alleviate poverty. Its founders believed that the best way to accomplish this mission would be to open up avenues of economical empowerment to disadvantaged women. This way, they...read more
At the recently held European Microfinance Week, several leading microfinance experts were asked about the future of the field, and discussed key industry trends for the next five to ten years. With the world in constant flux and global finance scrambling to provide...read more