Microfinance

• explanation

  • involves giving small loans to people
  • who could not get one from the bank. This loan is given to support people to set up small businesses
  • microfinance helps people to lift themselves out of poverty
• example

  • The grameen bank in Bangladesh was the first microfinance organisation of its kind.
  • However, many people especially LICs, lack basic numeracy skills or training to make their business work. The interest rates can be very high, and if people can't repay the loan, their debts and poverty can get worse.