Mikrokrediitin

Mikrokrediitti, often referred to as microcredit, is a financial service that provides small loans to low-income individuals or groups who typically lack access to traditional banking services. These loans are often used to fund small businesses or entrepreneurial activities, enabling recipients to generate income and improve their livelihoods. The concept of mikrokrediitti gained significant traction in the late 20th century, with institutions like Grameen Bank in Bangladesh playing a pioneering role.

The core idea behind mikrokrediitti is to alleviate poverty by empowering individuals, particularly women, who are often excluded from formal financial systems. Instead of requiring collateral, mikrokrediitti lenders often rely on group lending models, where borrowers form small groups and are jointly responsible for repaying each other's loans. This social collateral mechanism encourages peer pressure and support, leading to high repayment rates.

While mikrokrediitti has been lauded for its potential to foster economic development and reduce poverty, it has also faced criticism. Concerns have been raised regarding high interest rates charged by some microfinance institutions, the potential for over-indebtedness among borrowers, and the effectiveness of mikrokrediitti as a sole solution for poverty eradication. Despite these challenges, mikrokrediitti remains a significant tool in the development finance landscape, with ongoing efforts to refine its practices and expand its reach responsibly.