Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment, or a verifiable credit history. It is designed to support entrepreneurship and alleviate poverty. Many recipients are illiterate, and therefore unable to complete paperwork required to get conventional loans. As of 2009 an estimated 74 million people held microloans that totaled US$38 billion. Grameen Bank reports that repayment success rates are between 95 and 98 percent.
Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings and checking accounts; microinsurance; and payment systems, among other services. Microfinance services are designed to reach excluded customers, usually poorer population segments, possibly socially marginalized, or geographically more isolated, and to help them become self-sufficient. ID Ghana is an example of a microfinance institution.
Aga Khan Agency for Microfinance (AKAM) is a microfinancing agency of the Aga Khan Development Network.
The non-governmental organisation based in Bangladesh which provides microcredit financing.
Micro financing in Tanzania started in 1995 with SACCOS and NGOs. It has since then contributed to the increasing success of international micro financing. Microfinance stills remains a relatively new in Tanzania since it has not penetrated yet. Since 1995, microfinance has been linked to poverty alleviation programs and women. The government made efforts to ensure commercial banks have continued to provide financial support to the small entrepreneurial business. However a microfinance National Policy was implemented in 2002 to encourage and support microfinances in the country. Since the implementation, micro financing was officially launched and recognized as a poverty alleviation tool. Due to its increase exposure and use in the nation, commercial banks have developed interests in to offer microfinance. There are various microfinance banks that functions as supporting institutions in the country that usually provide microfinance services. These may include the CRDB, National Microfinance Bank, and AKIBA. However there are also other few banks that are concerned with micro financing in Tanzania such as the PRIDE and SEDA, Tanzania Postal Bank and FINCA. Community and small banks have also expressed interest in the same including the NGOs and other non-profit organizations.
Village banking is a microcredit methodology whereby financial services are administered locally rather than centralized in a formal bank. Village banking has its roots in ancient cultures and was most recently adopted for use by micro-finance institutions (MFIs) as a way to control costs. Early MFI village banking methods were innovated by Grameen Bank and then later developed by groups such as FINCA International founder John Hatch. Among US-based non-profit agencies there are at least 31 microfinance institutions (MFIs) that have collectively created over 800 village banking programs in at least 90 countries. And in many of these countries there are host-country MFIs—sometimes dozens—that are village banking practitioners as well.
IDFC Bharat Ltd is a microfinance bank, operating in the Tamil Nadu area of South India. Since 1993, it has provided small loans to women without access to formal credit and who typically have daily incomes of less than INR 80 (US$2) per day.
Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business, but does not include any institution whose principle business is that of agriculture, industrial activity, purchase or sale of any goods or providing any services and sale/purchase/construction of immovable property.
Women's World Banking is a nonprofit organization that provides strategic support, technical assistance and information to a global network of 55 independent microfinance institutions (MFIs) and banks that offer credit and other financial services to low-income entrepreneurs in the developing world, with a particular focus on women. The Women's World Banking network serves 24 million micro-entrepreneurs in 32 countries worldwide, of which 80 percent are women. It is the largest global network of microfinance institutions and banks in terms of number of clients, and the only one that explicitly designates poor women as the focus of its mission.
The SIDBI foundation for Microcredit (SFMC)
Hattha Kaksekar Limited or HKL is a microfinance institution and a deposit-taking institution in Cambodia. In terms of loan portfolio, HKL is ranked fourth and it has the third largest saving portfolio among Cambodia MFIs.
Angkor Mikroheranhvatho (Kampuchea) Co., also known as AMK, is a registered microfinance institution (MFI) headquartered in Phnom Penh, Cambodia with over 280,000 active borrowers. AMK is the largest provider of credit in Cambodia in terms of borrower numbers and has branches in 23 provinces and Phnom Penh city. It has over 10,000 active savers and over 1,000 employees. AMK provides several microfinance services, including microcredit, microsavings, and mobile money transfers.
Microfinance Institutions Network is an association for the microfinance sector in India. Its member organizations constitute the leading microfinance institutions in the country.
Intean Poalroath Rongroeurng Ltd.(IPR) is a registered microfinance institution focused on the domestic agricultural sector in Cambodia. IPR is headquartered in Phnom Penh, Cambodia, and operates six branch offices including several service post offices in five provinces: Kandal, Takéo, Pursat, Batdambang, and Banteay Meanchey. The Company provides credit to farmers living in rural areas that are engaged in the production of rice, cassava, maize, sesame, and other agricultural related enterprises. As of March 31, 2012, IPR manages the 12th largest loan portfolio among registered micro-finance institutions in Cambodia.
The impact of microcredit is a subject of much controversy. Proponents state that it reduces poverty through higher employment and higher incomes. This is expected to lead to improved nutrition and improved education of the borrowers' children. Some argue that microcredit empowers women. In the US and Canada, it is argued that microcredit helps recipients to graduate from welfare programs. Critics say that microcredit has not increased incomes, but has driven poor households into a debt trap, in some cases even leading to suicide. They add that the money from loans is often used for durable consumer goods or consumption instead of being used for productive investments, that it fails to empower women, and that it has not improved health or education.
An interest rate ceiling is a regulatory measure that prevents banks or other financial institutions from charging more than a certain level of interest.
Kashf Foundation is a non-profit organization, founded by Roshaneh Zafar in 1996. Kashf is regarded as the first microfinance institution (MFI) of Pakistan that uses village banking methodology in microcredit to alleviate poverty by providing affordable financial and non-financial services to low income households - particularly for women, to build their capacity and enhance their economic role. With headquarters in Lahore, Punjab, Kashf has regional offices in five major cities and over 200 branches across the Pakistan.
Satin Creditcare Network Limited is a non-banking finance company (NBFC), licensed by the Reserve Bank of India. It was founded in 1990 by Mr. H P Singh. The company's offers financial requirements for excluded households at the bottom of the pyramid. Satin Creditcare Network Limited is a micro-finance institution (MFI) in the country with presence in 7 states and more than 12,00 villages.
Update: Village Financial Services Ltd is now renamed to VFS Capital Ltd.
LifeBank started operations on March 21, 1970 in Maasin, Iloilo as Rural Bank of Maasin. It is divided into two corporate arms each with its own designated finance and banking services functions: the LifeBank RB and LifeBank MFI. As of 2021, it has a total of 4 branches and 44 branch-lite units (BLU) under LifeBank - a Rural Bank in Western Visayas and 536 branches all over the Philippines under LifeBank MFI, an NGO microfinance arm of LifeBank.
