Microcredit

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Related to Micro lending: Microfinance

Microcredit

A form of lending that originated in the 1970s with small loans made to very small enterprises in Bangladesh, called micro-enterprises, with the intention of alleviating high poverty levels. Microfinance institutions (MFIs) issue micro-loans that have higher-than-normal interest rates meant to cover the high costs associated with issuing small loans. Given that the purpose of microcredit is to be a poverty relief mechanism, individuals with low credit scores who lack capital and steady employment are then able to receive loans to develop their enterprises. See: Microfinance

Microcredit

The practice of making loans to extremely poor persons to help them rise from poverty through entrepreneurship. That is, one may make a loan of, say, $25 which gives someone the start-up capital necessary to make something small to sell. Microcredit loans are usually either interest-free or carry interest that does not compound. Additionally they offer flexible repayment plans; generally one is asked to pay anything one can so long as one pays something. Microcredit is most common in the developing world; it started in Bangladesh in the 1970s. See also: Grameen Bank, Mohammed Yunus.
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The publication's article on micro lending presents the views of economists who are cautiously observing the increased rate at which the sector is growing.
Similarly, In India, past government support for micro lending has turned to opposition.
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Rohit Wahi, chief executive officer and country head for FirstRand Bank India, said, 'Our decision is in line with our strategy to streamline our business in India and further strengthen our successful initiatives, namely, corporate and investment banking, Indo-Africa corridor trade and micro lending.
A Gabarone-based financial inclusion focused group with consumer, micro lending and deposit-taking subsidiaries across Southern and East Africa, Letshego Holdings Limited, has acquired a 100% stake in FBN Microfinance Bank (FBN MFB).
The programme, called the Pure Michigan Micro Lending Initiative, is backed by a Huntington statewide commitment of USD 25m including USD 5m in support of Detroit small business lending starting immediately.
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