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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THE ` 20,000- crore MUDRA ( Micro Units Development and Refinance Agency) Yojana, launched by Prime Minister Narendra Modi on Wednesday to " fund the unfunded" with microlending of up to ` 10 lakh at low rates of interest is likely to be converted into a bank in the next 12 months.
But there is a big "but" in the microlending story.
Through Kiva's proven microlending model, anyone with an Internet connection and $25 can help crowdfund a loan to a small business owner profiled on kiva.
Kiva is a nonprofit organisation working to alleviate poverty around the world by connecting people through microlending.
org/invitedto/accountants_for_social_good/by/emofund to help ASG surpass their goal of 5,000 loans and get involved in microlending.
Called the Chicago Microlending Institute, the facility will administer a USD1m fund to provide micro loans to small businesses.
In 2006, the Washington-based Cuba Study Group (CSG) partnered with Mexico's Banco Compartamos to set up a microlending program for emerging small businesses in Cuba, with $10 million as seed capital.
Microlending activity has improved this year overall, said Mr.
Nobel Peace Prize laureate Muhammad Yunus is worried about the future of the pioneering microlending bank he founded now that Bangladesh's government has ousted him as its head.
Even with the extra requirements that the CDCI funds carried, Godfrey-Smith said the money was still valuable to the CU as it has allowed Shreveport to jump start a program of microlending to the CU's entrepreneurial members.
The amusement park has been hosting these events since 2000 for the 42-year-old Muslim nonprofit, whose president is Muhammad Yunus, a Nobel Prize winner who pioneered microlending through the Grameen Bank in Bangladesh.
Gallup data reflect this to a certain degree, but there is little difference between the poorest and richest groups, demonstrating that income isn't the only factor holding back the growth of microlending in sub-Saharan Africa.