International Center for Microfinance and Social Business

What is Mikrofinance?


Grameen Project; the most known microcredit application worldwide is the major part of the microfinance concept. Microfinance is the general term used for financial service targeting poor and low-income people, who do not have access to typical banking services. This method, developed over the last 30 years, delivers very small loans to unsalaried borrowers, taking no collateral. This is an idea that low-income people are capable of lifting themselves out of poverty if given access to financial services.

More broadly, microfinance refers to a movement that envisions a world in which low-income households have permanent access to a range of high quality and affordable financial services offered by a range of retail providers to finance income-producing activities, build assets, stabilize consumption, and protect against risks through several methods.

These methods include group lending and liability, pre-loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly.

Services covered within the microfinance applications include savings, credit, insurance, remittances, payments and others.