Microcredit

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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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Mashroue program, according to Jarari, offers micro loans to support small projects that contribute to improving the poor and families in need of income, supporting all production sectors, enhancing the traditional and heritage industries and preserving them from extinction in addition to improving the Education sector through offering educational loans to the students.
These loans are helping small businesses to create and safeguard jobs and also boosting their owners' confi-dence Nicola Edwards, Micro Loan Fund Manager at Finance Wales said she was impressed by the ambition and diversity of the businesses her micro loans team works with.
China-based WeBank, a unit of Internet bank, Tencent, has reported an increase in micro loans.
MSIF provided a PS100,000 investment using a combination of money from the Regional Growth Fund (RGF) and The North West Fund for Micro Loans.
Having already invested their own funds into the business as well as securing several co-investors, owners Daniel Wimpelberg and Tom Hughes used a PS30,000 micro loan from Finance Wales to complete some final construction works.
By giving this needed capital infusion, a micro loan can help make a significant difference in someone's life.
Micro loans would be issued to companies that have 10 or less employees with an annual income of less than 1 million TL.
Bank of America said the grants may unlock as much as $100 million in low-cost, long-term capital for small business micro loans nationwide over the next 12 months.
The underlying loan portfolio comprises priority sector urban micro loans originated by Equitas with final maturity in October 2010.
Since the end of 1998, "Lakota Fund has made 338 micro loans to members of the Oglala Sioux Tribe living on the Pine Ridge Indian Reservation.
FINANCE Wales has pumped millions of pounds in micro loans into small to medium sized enterprises across Wales but it says it wants to do more to help hundreds of other small firms in North Wales.
Agency for International Development, Uganda (USAID), on average micro loans in Uganda went to individual, usually agrarian households.