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From Benedicte Gravrand, Geneva:
Microfinance is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people. Most transactions involve small amounts of money, frequently less than US$100. Here is an overview of this facet of financing and an interview with PlaNet Finance’s vice-president, Mr. Ventura.
What is microfinance?
Ever since pioneers such as Professor Muhammad Yunus of Bangladesh had the idea of giving loans to the very poor in the 1970s, the microfinance approach to tackling poverty, which concerns half the world’s population, has proven an enlightened one. Prof. Yunus started the Grameen Bank Project in 1976, which became a bank a few years later. The bank has around 6 million borrowers, most of whom women, and around 2,000 branches. As 98% of loans are repaid, they generate profit. Prof. Yunus later obtained a Nobel Peace Prize in 2006 for his achievements.
What does Microfinance do?
Mricrofinance’s modus operandi is to provide uncollateralized small scale loans to poor self-employed, usually home-based entrepreneurs. Most of those borrowers do not have access to financial services. Those entrepreneurs, usually women, often receive financial training and guidelines, and are part of small groups of borrowers who are accountable to each other for the repayments. Microfinance is operated in Asian, Latin...................... To view our full article Click here
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