Economics Microfinance Questions
Microfinance refers to the provision of financial services, such as loans, savings, and insurance, to low-income individuals or groups who lack access to traditional banking services. It aims to alleviate poverty and promote economic development by empowering individuals to start or expand their own businesses. Microfinance institutions (MFIs) typically provide small loans, often without collateral, to borrowers who are unable to secure credit from traditional banks. These loans are used for income-generating activities, such as starting a small business or purchasing equipment. Microfinance works by providing financial services tailored to the specific needs of low-income individuals, promoting financial inclusion, and fostering entrepreneurship and self-sustainability.