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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It said the overhang of the triple blows of note-ban, GST introduction and farm loan waiver is still visible in the micro-lending segmentm which constitutes as mnuch as 72 percent of its assets.
Micro-lending allows individuals to not only build a sustainable future for micro-entrepreneurs, but also a supportive ecosystem for development at the macro level.
Kueski is the leading online micro-lending platform in Mexico and Latin America.
Webb, Kristiani and Olaru (2009) conclude that a critical factor influencing micro-loan program success is the local image, reputation, and long-term sustainability expectations of the micro-lending organization.
She voiced strong support for the micro-lending organisation, which has fallen out of favour with the Bangladesh government.
The draft budget includes 1 billion som for affordable credits for farmers and another 1 billion som for creation of micro-lending organizations in rural municipalities with the purpose to improve living standards of local communities.
"You know, we put a huge amount of US taxpayer money every year into education programs in Pakistan, micro-lending programs, flood relief, all kinds of economic opportunity programs because we believe a strong Pakistan is in our interests," she added.
However, the large amount of people that have been helped with a relatively small amount of money seems to indicate that micro-lending is a successful aid and poverty reduction tool, even if it is an unsustainable for-profit model.
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.
Tapscott, chairman of the think tank nGen-era Insight and fellow of the World Economic Forum, and Williams, a speaker and consultant on business collaboration, stress the value of collaboration, giving credence to the idiom, "two heads are better than one." 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 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.
The programme includes a micro-lending facility, allowing the runaways to secure a loan without collateral of up to Dh1,500.