ABSTRACT
In recent years, the world has witnessed a signifi cant growth in microfi nance institutions (MFIs) .1 MFIs are specialised entities that provide a small amount of business credit (popularly known as microcredit or microfi nance), usually without collateral, to very poor people who lack steady employment and a verifi able credit history. The objectives of these institutions are to build the entrepreneurial capacity of borrowers (micro-entrepreneurs) by providing small (micro) fi nance with a view to generating employment opportunities and assisting them with training and education to sustain entrepreneurial activities. It is estimated that at the end of 2010, there were 3,625 MFIs of which 1,746 were located in Asia, 1,009 were in Sub-Saharan Africa, 647 were in Latin America and the Caribbean and the remaining 223 in the Middle East and North Africa (Reed & Maes, 2012). Due to signifi cant growth in the number of MFIs, the United Nations declared 2005 the ‘International Year of Microfi nance.’
