Microfinance is a category of financial services targeted at 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 checking accounts; micro insurance ; and payment system .Microfinance services are designed to be more affordable to poor and socially marginalized customers and to help them become self-sufficient
Microfinance initially had a limited definition – the provision of microloans to poor entrepreneurs and small businesses lacking access to credit . The two main mechanisms for the delivery of financial services to such clients were:
(1) relationship-based banking for individual entrepreneurs and small businesses; and
(2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group. Over time, microfinance has emerged larger movement whose object is “a world in which as everyone, especially the poor and socially marginalized people and households have access to a wide range of affordable, high quality financial products and services, including not just credit but also savings, insurance, payment services, and fund transfers.”
Micro Finance Banks 