Microfinance and Self-Help Groups in India
What Microfinance Is
Microfinance means offering small loans, savings and insurance to people who are poor or excluded from ordinary banks.
Microfinance provides financial services in very small amounts to people who cannot get loans from regular banks, usually because they lack collateral or documents.
The idea
A woman who needs a few thousand rupees to buy a sewing machine or stock for a stall can be a good borrower, even without property to pledge.
The services
Microfinance includes small loans, savings accounts, insurance and money transfers.
Why it matters
Access to credit lets poor households smooth spending, start small businesses and cope with emergencies.
A vegetable seller borrows to buy stock in bulk, earns more, and repays in weekly instalments.
It is usually a business that charges interest.
- Microfinance offers small financial services.
- It serves people excluded from banks.
- It includes loans, savings and insurance.
- It is typically a commercial activity.
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