chapter  1
12 Pages

Introduction to Microfinance

Microfinance is a small-scale financial service that includes lending to and saving from low-income clients who are generally regarded as poor. Some microfinance institutions also provide insurance and payment services. Microfinance is often targeted at supporting the poor who cannot be reached through conventional financial channels (Bornstein, 1996; Ledgerwood, 1999; Elahi and Danopoulos, 2004). It is a means of generating and redistributing finance for those who are among both the socially and economically deprived sections of societies (Dale, 2001). The primary goal of micro lending is to generate an entrepreneurial spirit, which is geared to help borrowers generate income through engaging in self-employment (Rankin, 2001; Sundaresan, 2008).