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1. MICROCREDIT
AND
MICRO FINANCE
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2. • Microfinance is the supply of
loans, savings, and other basic
financial services to the poor.
People living in poverty, like
everyone else, need a diverse
range of financial instruments to
run their businesses, build
assets, stabilize consumption,
and shield themselves against
risks.
MICROFINANCE
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3. • Financial services needed by the
poor include working capital
loans, consumer credit, savings,
pensions, insurance, and money
transfer services.
• The poor rarely access services
through the formal financial
sector.
MICROFINANCE
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4. •They address their need for
financial services through a variety
of financial relationships, mostly
informal.
•Credit is available from informal
commercial and non-commercial
money-lenders but usually at a very
high cost to borrowers.
MICROFINANCE
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5. • Savings services are available
through a variety of informal
relationships like savings
clubs, rotating savings and
credit associations, and
mutual insurance societies
that have a tendency to be
erratic and insecure.
MICROFINANCE

6. DIFFERENCE
BETWEEN
MICROFINANCE
AND
MICROCREDIT
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7. • We need to differentiate
between ‘microcredit’ and
‘microfinance’
• Sadly, the terms are typically
used interchangeably, with some
critics decrying the quality of
microcredit whereas using the
THE DIFFERENCE
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8. • It is not clear, therefore,
whether or not their criticism
is restricted to microcredit or
whether or not if truth were
told they are conjointly
casting doubt on the quality of
savings, insurance and cash
transfer.
THE DIFFERENCE
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9. • Microfinance alone cannot solve all the
problems of poverty:
• Poverty is multidimensional and
includes poor health, lack of education
and skills, inadequate living
conditions, and therefore the threat of
violence, additionally as lack of
financial gain and therefore the poor
quality of labor.
THE DIFFERENCE
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10. • During this complicated
atmosphere, whereas
microfinance could facilitate, it
is chimerical to expect one
intervention by itself to deal
with of these different problems
and dramatically amendment
poor people’s lives.
THE DIFFERENCE
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