Mikrofinanz

Mikrofinanz, also known as microfinance, refers to the provision of financial services to low-income individuals and small businesses who typically lack access to traditional banking systems. These services can include small loans, savings accounts, insurance, and money transfers. The primary goal of microfinance is to empower impoverished individuals, particularly women, by providing them with the capital and tools to start or expand small businesses, thereby generating income and improving their living standards.

The concept gained significant traction in the late 20th century, with the Grameen Bank in Bangladesh, founded by Nobel Peace Prize laureate Muhammad Yunus, serving as a pioneering example. Microfinance institutions (MFIs) operate through various models, often involving group lending, where borrowers form small groups and are jointly responsible for loan repayment. This peer pressure mechanism helps to reduce default rates and fosters a sense of community support.

While microfinance has been lauded for its poverty-alleviating potential, it has also faced criticism. Concerns have been raised about high interest rates charged by some MFIs, the potential for over-indebtedness among borrowers, and the effectiveness of microfinance as a sustainable poverty reduction strategy. Despite these challenges, microfinance remains an important tool in the development sector, aiming to foster economic inclusion and create opportunities for marginalized populations.