Micro Finance
Avi Fine is active in lending
money to unique small businesses in the developing world
to help the world's working poor make a difference in
their lives achieving greater economic independence. A
generous portion of Avi's net income is dedicated
towards supporting micro lending programs. To view Avi's
portfolio
click here
What is
microfinance?
"Microfinance is the supply of
loans, savings, and other basic financial services to
the poor." (CGAP)
As the financial services of
microfinance usually involve small amounts of money –
small loans, small savings etc. – the term
"microfinance" helps to differentiate these services
from those which formal banks provide.
Why are they small? Someone who
doesn't have a lot of money isn't likely to want to take
out a $5,000 loan, or be able to open a savings account
with an opening balance of $1,000. Hence – "micro".
What is an MFI?
A microfinance institution
(MFI) is an organization that provides microfinance
services, ranging from small non-profit organizations to
large commercial banks.
"Historical context can help
explain how specialized MFIs developed over the last few
decades. Between the 1950s and 1970s, governments and
donors focused on providing subsidized agricultural
credit to small and marginal farmers, in hopes of
raising productivity and incomes. During the 1980s,
microenterprise credit concentrated on providing loans
to poor women to invest in tiny businesses, enabling
them to accumulate assets and raise household income and
welfare. These experiments resulted in the emergence of
nongovernmental organizations (NGOs) that provided
financial services for the poor. In the 1990s, many of
these institutions transformed themselves into formal
financial institutions in order to access and on-lend
client savings, thus enhancing their outreach.
An MFI can be broadly defined
as any organization—credit union, down-scaled commercial
bank, financial NGO, or credit cooperative—that provides
financial services for the poor." (CGAP)
"The World Bank estimates that
there are now over 7000 microfinance institutions,
serving some 16 million poor people in developing
countries. The total cash turnover of MFIs world-wide is
estimated at US$2.5 billion and the potential for new
growth is outstanding." - Data Snapshots on Microfinance
- The Virtual Library on Microcredit
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