What is Microfinance?
Microfinance means providing poor households or small business owners who do not have access to commercial banks, with financial and non-financial services to help them work in productive activities or develop their small business, thus, enabling them to build assets and capabilities, increase their community participation, stabilize their consumption and protect their household from shocks.
How does Microfinance contribute to empowering the poor?
Throughout the years, microfinance has emerged as an effective strategy in addressing poverty alleviation and empowering the poor. In fact, experience demonstrates that microfinance can help the targeted categories to increase their income, carry out effective business activities, and reduce their vulnerability to external shocks. Microfinance can also be an effective mechanism for self-empowerment, especially for women, by providing them access to specialized financial services.
As such, microfinance plays an important role in the fight against poverty, like generating income from employment through increased economic efficiency. It also positively impacts household living conditions, food security, and education for children through a more secure and consistent cash flow over the year.