what is micro - finanace?

Question

I am not in finance industry at all - so anyone can give me an explaination with an example

Answer 1

It's the extension of very small loans to the unemployed, to poor entrepreneurs and to others living in poverty who are not bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimum qualifications to gain access to traditional credit.

Answer 2

Hello,

Micro finance is a relatively new term. It is used to explain a system of loans & savings, usually in countries where there is such a high level of poverty, where people are so poor they cannot get conventional bank accounts, loans or credit.

For Example: In rural india the farmers couldnt afford the buy enough seeds & chemical furtilisers for the next seasons crops. So the farmers in the village all clubbed together & formed a savings union were each person although poor gave a tiny amount of cash each month into the scheme. From this micro loans enabled them to buy the seeds & furtilisers they needed. Without the micro financing this just wouldnt have been possible for each farmer involved.

**Another aspect of micro finance is when a person or people are so poor they dont have any security or assetts against which to borrow money, any money at all.

So Micro finance is where small amounts of money are collected and small loans or finance is enabled as a result. Without such schemes the people would be quite literally pennyless and might not even have enough to eat or survive (yes! hard to believe but true?!!).

**Strength in numbers, the benefit of clubbing together even if you are poor. Something is better than nothing? when you have no other options left.

IR

Answer 3

Have a look here: http://en.wikipedia.org/wiki/Microfinance
Quote: Microfinance is a term used to refer to the activity of provision of financial services to clients who are excluded from the traditional financial system on account of their lower economic status. Unquote.

Answer 4

My wages

Answer 5

http://www1.worldbank.org/sp/safetynets/Micro%20Finance.asp

here you go xxx