Ymicro.org

What is MicroFinance

Microfinance involves helping individuals and small groups who have no access to mainstream banking, obtain access to micro loans and micro savings.  A new entrepreneur with no collateral or credit record, can obtain a first loan to start a small business, and if the loan is repaid, can secure a second loan for a piece of equipment or more inventory to expand their micro enterprise.

Microfinance has evolved over the past two decades into a significant tool for helping vulnerable populations around the world work their way out of poverty.  The leading advocate for microfinance has been Muhammad Yunus who was awarded the Nobel Peace Prize in 2006 for his work in Bangladesh.  Today there are over 10,000 Microfinance Institutions (MFIs) in Asia, Africa and Latin America, doing billions of dollars worth of loans.  However, with two thirds of the world population living on $2 a day or less, microfinance is available to fewer than 5% of those who could benefit from it.