Context of microfinance internationally
Micro finance is defined as the provision of microloans to poor entrepreneurs and small business man who lack access to banking and related services.
Over the past centuries, practical thinkers, from 15th century found the European credit union and in the 1970s, have tested practices and built institutions designed to bring the kinds of opportunities and risk-management tools that financial services can provide to the doorsteps of poor people.
Moreover Regionally, the highest attention was in India where there were 188 million accounts representing 18% of the total national population. The lowest attenuation was in Latin America and the Caribbean islands where 14 million accounts representing 3% of the total population) and Africa also plays a key role among others by having (27 million accounts representing 4% of the total population,
In Canada and the US, microfinance organizations target downgraded populations who are unable to gain access to mainstream bank financing.
Further investigation in United States
In the late 1980s, microfinance institutions developed in the United States. They served low-income people. By 2007, there were 500 microfinance organizations operating in the US with 200 lending capital.
Further investigations in Canada
Microfinance in Canada took a major part in the process of developing the credit unions. These credit unions provided financial services to the Canadians who could not gain access to financial services.
Microfinance in the India
Loans to poor people by banks have many limitations including lack of security and high operating costs. As a result, microfinance was developed as an alternative to provide loans to poor people with the goal of creating financial equality.
Ela Bhatt had initiated women’s own SEWA Cooperative Bank in 1974 in Ahmedabad, Gujarat, perhaps one of the first modern day microfinance institution of its kind. Muhammad Yunus, a Nobel Prize winner, had introduced the concept of Micro-credit in Bangladesh in the form of the “Grameen Bank”.
Finally, Microfinance has a positive impact on countries even if the country is poor or rich
-304800-285750Name: – K L P W Perera
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