In India, the Task Force on Supportive Policy and Regulatory Framework for Microfinance has defined MF (Microfinance) as the “Provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban or urban areas for enabling them to raise their income levels and improve living standards”.
Major characteristics of Microfinance are:
- Small amounts of saving and credit
- Collateral free credit through collateral substitute like peer pressure
- Group formation to create peer pressure and bring discipline
- Easy access
- Less and simplified procedures and documentations
- Credit for both investment and consumption needs
- Poor are bankable
- Affordable interest rates
- Sustainability
There are different methodologies for delivering microfinance like Grameen bank model of Prof.… Read the rest