microfinance loans

• Microfinance loan is a type of banking service provided to low-income individuals or groups who otherwise wouldn't have access to financial services. They provide farmers with the vital cash their families need to escape a cycle of poverty, however it must be paid back but with reasonable interest rates. ​
• They provide money to businesses who may normally struggle to get

  credit. Low-income individuals are then capable of lifting

  themselves out of poverty if given money to start their own

  businesses. They can then use the profit to improve their homes,

  send their children to school and pay for healthcare. ​
• advantages

  They are really small loans, so it is reasonable that they are able to pay them back.
• advantages

  They have very low interest rates.
• advantages

  People can feel like they can stand on their own two feet instead of feeling dependent on or taken advantage of by others.​
• advantages

  It is a great opportunity for poor people to lift themselves out of poverty.
• disadvantages

  The concept is easily abusable and some companies bump up the interest rates, meaning that its harder for the loaners to pay it back.
• disadvantages

  Some companies use it to take advantages of impoverished individuals.
• disadvantages

  • Sometimes the businesses created are not successful and there is a high pressure to repay the loan which can lead to debt levels and sometimes even suicide.​