WHAT IS MICROFINANCE ?
 Giving loans and financial services and facilities to people with low income who don’t have access to traditional banking system. Usually traditional banks not provide financial services to people with little or no cash income. However risks exist because the bank has little recourse against defaulting borrowers.
 Help for the development of a country’s financial system
 It is believed that this system will give a chance to poor people to get out of poverty: providing poor people the capital they need to open their own business or to expand it
 However there is low information concerning the benefice of microfinance. In fact, over-borrowing can be a danger for poor people
 Lending money to poor people has a long term view because it can develop a healthy national financial system
 Success of Grameen Bank inspired the entire world
WHAT IS A MFI (Microfinance Institution)?
 Organization providing financial services to people with low income and vulnerable with no access to traditional banking system
 Exist many kinds of microfinance institutions : structure or mission
 80’s: emergence of non-governmental organizations providing little loans to poor people
 90’s: became financial institutions
 Since these years these non-governmental financial institutions have proven that poor people are reliable and can have access to financial services
 CHARACTERISTICS:
 Registered legal organizations
 Offer different financial services
 Not follow bank regulation
 Can be government-owned
 Can be member-owned
 Can be formed by social-view shareholders
 Can be form by profit-maximizing shareholders
 The services a MFI offer are limited by the structure of the institution
CHARITABLE MFI
 Way to help people so the name of charitable MFI corresponds. However it consists on a MFI which is not aimed at profit
 Role of donations: charitable MFIs exist thanks the help of donations
 International and private donors,