The latest growth is in the financial service that aims at providing in a better life to the underprivileged people; is the Microfinance. There are a lot of people who live in a very small earning, just as low as $2, and sometimes even find this earning as impossible.
So, what are the benefits of microfinance, why is it getting more popular?
Gives the underprivileged an access to credit:
Since money is the biggest problem here to all, especially in the underprivileged group; microfinance helps those people to gain access to some smaller credit notes and improve their business or develop one or help themselves in times of drought.
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The life of debt that most people live is extremely bad, that lets them die in poverty. No larger banks offer a homeless, a jobless person a loan to come up in life, to provide basic facilities in life. That’s where the microfinance comes in the picture, it gives them a lease of life by offering loan without any collateral. This, in turn, helps in reducing the poverty levels across the world.
Better rates than ordinary banks:
The rate of interest offered by traditional banks are way too high and is standardized no matter what! But, in microfinance, the concept is mainly focusing on helping people live a better life, to start living on their own. Hence the loan is sort of biased, but on good terms, the person who is found more capable of earning and repayment is given lower interest rates and also offered a newer loan once the first loan is repaid. This is helping more women to come out of their homes in developing their business, be it in baking or basket making.
Helps in educating the underprivileged:
Education is the biggest weapon that one can use in eradicating the illness of the world, like the poverty, malnourishment, lack of job, early marriage and pregnancy, abuse and harassment and many others. When a flock is educated they tend to pass on the knowledge, the learnings to their group and encourage them to live a better life.
So, this small finance help families in educating their children, give them a future, a ray of hope to build a better nation and also to earn a good stable income once their children settle down with jobs. This is more fruitful in girls especially, as they educate others and also a whole family in turn.