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
If you take a close look at any booming fintech market, you will notice that most companies are moving full steam ahead with the formation of credit and payment products. This means that all focus has been placed on products that scale quickly instead of more...read more
We recently delved into the ways that financial assets stand to benefit from blockchain technology so we can now discuss a bit about which markets stand to be affected most by this trend. There has been much talk recently about blockchain technology, usually in the...read more
Digital innovation is trending in the financial inclusion sector. Words like big data, mobile wallets, and digital credit are buzzwords at financial inclusion and microfinance conferences. Microfinance institutions (MFIs) in general understand that they need to...read more
Blockchain Technology and the World of Finance These days, all you need is an internet connection to send any amount of money anywhere in the world. But that is just the tip of the iceberg of how the financial system is potentially being affected. Legacy financial...read more
Bringing Financial Services to the Philippines In a case study conducted by FinTech Futures, the Philippines-based fintech company Mynt and its efforts in micro-lending were explored. Mynt is part of Globe Telecom, a top mobile phone company in the Philippines with...read more
Microfinancing in Cambodia is enabling broader access to the country’s economic pie, thus helping move more citizens out of poverty. However, the microfinance industry is not reaching its full potential, as high interest rates keep borrowers in debt and make the loans...read more
There has been a lot of hype about the Fintech (financial technology) industry. It is referred to as one of the biggest disrupters of the modern era. The industry appears to be highly successful. The media outlets are filled with stories about new startups, public...read more
Key Investments Are Strengthening Fintech Startup Market in Nigeria Nigeria is fertile ground for financial technology entrepreneurs. The majority of Nigeria’s consumer base continues to be underbanked, a reality that has created a $5.5 billion market for...read more
The African Fintech Success Story: Can it be Duplicated in Asia? Both Africa and Asia face some similar socio-economic and geographical challenges. Improving national economies and equalizing access to financial services is key to paving the way for the countries of...read more
Mobile-based financial services have become more common in sub-Saharan African countries, particularly in Kenya. Cellphone availability has played a significant role in making financial services more accessible to all segments of the population. Low-income sectors of...read more