Microcredit

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Related to Micro-lending: Micro Lender

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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As will be discussed later in this article, further research is needed to strengthen micro-lending and better benefit micro-borrowers.
However, there are also studies that indicate increased community interaction facilitated by micro-lending builds social capital, and results in positive spillover effects within the community in which the micro-credit is available (Feigenberg 2010).
United States Agency for International Development (USAID), working with Volunteers for Economic Growth Alliance/ International Executive Service Corps (VEGA/IESC), has identified seven local partners to expand micro-lending throughout Lebanon: Association of Rural Development (ADR) in the South; Association Entraide Professionnelle (AEP) in Beirut; AlMajmoua in Beirut; Ameen in Hazmieh; Lebanese Cooperative for Development (CLD) in Zalka; Emkan in Beirut; and Makhzoumi Foundation in Beirut.
The micro-lending program will be a core program we offer through the Scott Ford Center," Hill said.
The study has the following objectives: 1) to know the extent of adequacy and effectiveness of the implementation of microfinance program components of City Social Welfare and Development Office in Butuan city in terms of information, education and communication; capability building; savings mobilization; and micro-lending and 2) to determine the predictors of development of microfinance beneficiaries when the program components are grouped according to adequacy and effectiveness.
They present case studies of those already embracing the "macrowikinomics" business model, such as a micro-lending company where 570,000 individuals help fund new ventures, an online community for people with life-altering diseases that also serves as a large-scale research project, and an Iraq veteran whose startup car company is "staffed" by more than 4,500 competing designers and supplied by microfactories around the world.
The programme includes a micro-lending facility, allowing the runaways to secure a loan without collateral of up to Dh1,500.
Map has seen a significant increase in business during July and anticipates further increases in micro-lending as many seek back-to-school and holiday gift-giving loans.
org, a global micro-lending website that helps low-income families create their own sustainable sources of income.
For the first time, we have the airline sector represented, as well as micro-lending financial credit organisation, one of the world's largest hotel groups, and a major Caribbean tourism destination," he added.
Although micro-lending on the Pine Ridge Indian Reservation following the Grameen Bank's group lending process has been suspended, other micro-lending processes continue.
Peer-to-peer lending (P2P) and micro-lending are fast becoming a primary source of credit for some cash-strapped businesses and entrepreneurs.