NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, August 25, 2004

“With little income or collateral, poor people are seldom able to obtain loans from banks and other formal financial institutions. Microfinance is one way of fighting poverty in rural areas. Through microfinance institutions such as credit unions, financial non-governmental organisations and even commercial banks, poor people can obtain small loans, receive money from relatives working abroad and safeguard their savings. Microfinance has changed the perception that poor people are not creditworthy. Records have shown that they are a good risk, with higher repayment rates than conventional borrowers. In some of the most successful microfinance institutions, repayment rates are 98 per cent.” Read full article here.