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
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.
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
Economic Inspiration for the New Year – the 2017 European Microfinance Week The 2017 European Microfinance Week was held in Luxembourg in early December and top industry executives joined forces to discuss and debate the challenges and opportunities facing...read more
The marketplace for cryptocurrency Initial Coin Offerings (ICOs) is becoming ever more diverse and fascinating. Numerous different kinds of ICOs are constantly emerging that use cryptocurrency, blockchain technology and Ethereum to address many different global...read more
Why Having Two Financial Sectors is a Problem for Nigeria Nigeria faces serious challenges as it attempts to use microfinance to overcome the serious problems affecting its financial sector. These problems are generally related to the dualistic nature of its financial...read more
In developing countries like Myanmar, microfinance is seen as an essential tool in helping people who are suffering financially to progress beyond poverty. It is also invaluable in empowering women to provide financial security for their families and pave the way to...read more
The highly ambitious biometric identity project known as Aadhaar (Hindi for “Foundation”) has been developed within India with the aim of giving everyone residing in the country a secure identity that can be definitively verified. Proponents of this vast project see...read more
As the astonishingly ambitious project of giving unique identifying numbers to all residents of India has gathered pace, the question of whether similar systems could or should be implemented elsewhere naturally arises. Although population registries have been created...read more
Followers of news from India and anyone interested in the issue of secure identification in today’s world will be aware of how the Aadhaar biometric identification system has been rolled out across India at an ever-increasing rate since it was first launched in 2009....read more
In simple terms, Aadhaar is the largest-scale program for establishing biometric identity ever launched. Taking its name from a Hindi word meaning “foundation,” Aadhaar aims to provide everyone living in India with a personal 12-digit identification number. This...read more
The theory behind microfinance is that if you empower poor people with access to financial services, they will be able to lift themselves out of poverty, improve the economic condition of their community and reach their full potential in life. This theory has had...read more