Mikrofinantsasutuste

Mikrofinantsasutuste (microfinance institutions) are financial institutions that provide financial services to low-income individuals and small businesses who lack access to traditional banking services. These institutions play a crucial role in promoting economic development and poverty alleviation by providing small loans, savings accounts, and other financial services to marginalized communities.

Microfinance institutions typically operate on a small scale, with a focus on serving clients who are unable to access formal financial services due to their low income, lack of collateral, or lack of credit history. They often use a variety of lending techniques, such as group lending, to mitigate the risk of default and promote financial inclusion.

The concept of microfinance was first introduced in the 1970s by Muhammad Yunus, a Bangladeshi economist, who founded the Grameen Bank. Since then, microfinance has grown to become a global phenomenon, with thousands of microfinance institutions operating in countries around the world.

Microfinance institutions face several challenges, including high default rates, limited access to collateral, and the need for sustainable business models. However, they also offer significant benefits, such as promoting economic development, creating jobs, and empowering marginalized communities.

In recent years, there has been a growing interest in the role of microfinance in promoting sustainable development and addressing global challenges such as poverty, inequality, and climate change. As a result, many governments and international organizations have increased their support for microfinance, providing funding, technical assistance, and policy support to help microfinance institutions thrive.