Mi

crof
inance:

Mi
crof
inance,
alsoknownasmi
crocr
edi
t,i
saf
inanci
alser
vicet
hatof
fer
sloans,
sav
ings
andi
nsur
ancet
oent
repr
eneur
sandsmal
lbusi
nessowner
swhodon'
thav
eaccesst
o
t
radi
ti
onalsour
cesofcapi
tal
,li
kebanksori
nvest
ors.Thegoalofmi
crof
inanci
ngi
sto
pr
ovi
dei
ndi
vi
dual
swi
thmoneyt
oinv
esti
nthemsel
vesort
hei
rbusi
ness.

Thei
deai
stopr
ovi
deext
remel
ypoorpeopl
ewi
thsmal
lloanssot
heycanst
artand
oper
ateabusi
ness.Thebor
rower
sar
eabl
etosav
emoneyandpaybackt
hel
oanov
er
t
ime

Whyar
eint
erestr
ateshi
gheri
nmi
crof
inancel
oanst
hani
ntr
adi
ti
onalbanki
ng?
Smal
lloansar
emor
eexpensi
vet
opr
ocesst
hanl
argeonesbecauset
heyt
akel
ongert
o
pr
ocess.Wi
thoutempl
oymenthi
stor
yorcol
l
ater
al,mi
crof
inancel
oansr
equi
reamor
e
hands-
on,t
ime-
int
ensi
ve assessmentt
o det
ermi
ne cr
edi
twor
thi
ness.Mi
crof
inance
i
nst
it
uti
ons(
MFI
s)usual
l
ysend ar
epr
esent
ati
vet
ovi
sitt
hecl
i
entaspar
toft
his
pr
ocess,maki
ngt
hepr
ocessev
enmor
echal
l
engi
ngandcost
lyi
nremot
eorspar
sel
y
popul
atedar
eas.Onceal
oani
sappr
oved,MFI
sof
tensendl
oanof
fi
cer
stodi
sbur
se
l
oansand col
l
ectpay
ment
sin per
son,whi
ch al
so addssi
gni
fi
cantexpensewhen
compar
edwi
tht
hewayt
radi
ti
onalbanksoper
ate.MFI
shav
etochar
ger
atest
hatar
e
hi
ghert
hannor
mal
banki
ngr
atest
ocov
ert
hei
rcost
sandkeept
heser
viceav
ail
abl
e.

Thegoodnewsi
sthatt
echnol
ogyandnewbusi
nessmodel
sar
ecr
eat
ingoppor
tuni
ti
es
t
oreducecost
sandr
eachmor
epeopl
e.Forexampl
e,banksandMFI
scanusemobi
l
e
moneyandagentnet
wor
kst
odi
sbur
sel
oansandcol
l
ectpay
ment
sinst
eadofsendi
ng
l
oanof
fi
cer
stor
emot
ear
east
omaket
heset
ransact
ions.Theset
ypesofi
nnov
ati
ons
hel
ptor
educet
hecostofdoi
ngbusi
nesswi
thpoorcl
i
ent
sand,i
ntur
n,canr
educe
char
gest
ocl
i
ent
s.