Microcredit

(redirected from Microloans)
Also found in: Dictionary, Encyclopedia.
Related to Microloans: microlending, Grameen Bank

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.
Mentioned in ?
References in periodicals archive ?
Discounted microloans will be issued for up to 5 years, and livestock and agricultural cooperatives - up to 7 years, annual effective rate of remuneration up to 6% per annum.
Cohn says, "ACLT has strong anecdotal evidence that the microloan program is needed.
Training the microloan recipients is crucial, but until now, it was a costly affair.
Alastair MacColl, chief executive of BE Group, said: "Following our involvement with funds such as Growth Vouchers and the Let's Grow grant scheme, working with Rivers Loan on the North East Microloan Fund will allow us to provide access for even more businesses to quality affordable funding.
A TEESSIDE digital advertising agency is looking to expand - and create more jobs - after securing a cash boost from the Finance for Business North East Microloan Fund.
Microloans which are directed to productive activities in the economy are essential.
At the end of the first quarter of 2014, the country has a total of 1,708 outstanding microloans, with a total balance of $774,000 and having a default rate of 1.
recently released a new report that explores the benefits and risks of microloans.
The new farm microloans, which are administered through the USDA's Farm Service Agency Operating Loan Program, offer a simplified application process and reduced paperwork compared with traditional farm loans.
According to the SBA's latest annual report on the state of small business financing in the United States, released in July 2012, the number of microloans outstanding decreased from $170.
Since 2005, Kiva has crowdfunded more than $400 million in microloans by connecting a growing global community of 890,000 lenders to 975,000 entrepreneurs from five continents.
Among the intended beneficiaries of this program, the organic farm sector could potentially benefit immensely from microloans.