Microfinance, also known as microcredit, is a type of banking service that targets low-income individuals or groups who typically lack access to conventional financial services. It encompasses a variety of services, including:

  • Microloans: Small loans provided to poor clients to help them engage in business activities.
  • Savings and Checking Accounts: Basic banking services to help individuals manage their finances.
  • Microinsurance: Insurance products tailored for individuals with low income.
  • Payment Systems: Services that allow for the transfer of funds and payments.

The primary goal of microfinance is to empower impoverished people to become self-sufficient by providing them with the financial tools to start small businesses, save money for the future, and insure against risks. It’s particularly prevalent in developing nations and often focuses on helping women and marginalized groups