What is micro finance ? For which type of category it works?
Micro finance is nothing but availing and making this loan for poor people and also people who have very low income who are in very deep requirement of loans with low interest
Microfinance is the arrangement of financial services including loans, savings, insurance, money transfers and remittances offered to the lower income groups or poor entrepreneurs,
People often get confused in terms Microfinance and Microcredit. Although the concept of Microfinance has its roots in Microcredit, but the former is a baseline term that includes several banking services such as savings account, loans, money transfers, insurance and other services. While the latter is only concerned with the disbursement of small loans at a low rate of interest to the poverty-hit individuals.
Most often the Microloans are given for the development of micro or small enterprises that does not have any collaterals against which the standard loan could be raised. The borrower is required to pay interest on the borrowed amount, but the interest rate is minimal. Also, the Microloans are given to those who live in developing countries and who are working in varied trades such as, carpentry, fishing, and transportation.
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