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What is Microfinance?
What is the scope of Microfinance?
How does microfinance help the poor?
What is Microfinance?
In today’s scenario Micro-Finance word has acquired new ramification, which is a set of financial services. This includes saving, credit, insurance and remittances aimed to ensure the benefit to the larger disadvantaged section of the society. The work of microfinance doesn’t limit itself there. Rather it extends to provide some sort of support services to these clients like motivating, organizing, linkages and training so that financial services delivered could be used properly. Furthermore, the lower income population is able to access financial services which previously were exclusively available to the upper and middle income population
What is the scope of Microfinance?
Micro-credit is best-suited to those with entrepreneurial capability and opportunity. This translates to economically active lower income people who can undertake activities that generate stable incomes.
Broadly it supports following 2 activities:
1. Financial services
2. Support services
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Financial Services
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Support services
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Saving
Credit
Insurance
Remittances
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Organizing
Motivating
Training
Consultancy
Linkages
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How does microfinance help the poor?
Microfinance plays an important role in fighting poverty. Microfinance increases household income, which leads to ancillary benefits: increased food security, the building of assets, and an increased likelihood of educating one’s children.
Microfinance is also a means for self-empowerment. It enables the poor, especially women, to become economic agents of change - they increase income, become business-owners and reduce their vulnerability to external shocks (illness, weather, etc)
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