What is 'Microfinance' ?
- Microfinance, also called microcredit?, is a type of banking service that is provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. While institutions participating in the area of microfinance most often provide lending (microloans can range from as small as Rs.100 to as large as Rs.25,000), shivneri banks offer additional services, such as checking and savings accounts, and micro-insurance products; and some even provide financial and business education. Ultimately, the goal of microfinance is to give impoverished people an opportunity to become self-sufficient.
History of Microfinance :
- Microfinance is not a new concept: Small operations have existed since the 18th century. The first occurrence of microlending is attributed to the Irish Loan Fund system, introduced by Jonathan Swift, which sought to improve conditions for impoverished Irish citizens. In its modern form, microfinancing became popular on a large scale in the 1970s. The first organization to receive attention was the Grameen Bank, which was started in 1976 by Muhammad Yunus in Bangladesh. In addition to providing loans to its clients, the Grameen Bank also suggests that its customers subscribe to its "16 Decisions," a basic list of ways that the poor can improve their lives. The "16 Decisions" touch upon a wide variety of subjects ranging from a request to stop the practice of issuing dowries upon a couple's marriage, to keeping drinking water sanitary. In 2006, the Nobel Peace Prize was awarded to both Yunus and the Grameen Bank for their efforts in developing the microfinance system.
Benefits of Microfinance :
- The World Bank estimates that more than 500 million people have directly or indirectly benefited from microfinance-related operations. The International Finance Corporation (IFC), part of the larger World Bank Group, estimates that, as of 2014, more than 130 million people have directly benefited from microfinance-related operations. However, these operations are only available to approximately 20 percent of the three billion people who qualify as among the world’s poor. In addition to providing microfinancing options, the IFC has helped establish or improve credit reporting bureaus in 30 developing nations. It has also advocated for adding relevant laws in 33 countries that govern financial activities.
- The benefits of microfinance extend beyond the direct effects of giving people a source for capital. Entrepreneurs who create successful businesses, in turn create jobs, trade, and overall economic improvement within a community. Empowering women in particular, as many microfinance organizations do, may lead to more stability and prosperity for families.
Each independent living by starting your home-based business with Shivneri banks varied micro loans- and contribute to additional income for your family. You can now invest in many more income-generating activities by accessing timely funds.
Create an additional source of income for your family starting a co-owned, Co-run business with other aspiring women, financed by our micro loan. You can now access group capital at your doorsteps and repay it conveniently with your other group members.