Microfinance

Objectives of MFI Lending to poor Offer other services Empower women

How MFI Works Individual or group loan Community clubs Weekly meetings

The Benefits of Microfinance Schemes Poor – access to banking, credit, services Loans to start businesses Empower women Employment Alternative to moneylenders Offers choices Stability ¤

Associated Problems Monitoring, collection Interest rates Expensive to get started Shady schemes Often doesn’t lead to increased household income or consumption Use women to get credit Loan size negligible High risk Diff. to challenge macro-level w/ micro-level approach ¤

Problems (cont.) Lack of effective national governance Lack of infrastructure Lack of demand / buying power in community Lack of business variety Lack of business-building ¤

Recap More like to help communities Often increases stability Recent meta-study shows progress Way to reach poor people Way to empower women Many obstacles that decrease potential benefit ¤