Microfinance began in the 1970s when Muhammad Yunus provided small loans to poor villagers in Bangladesh that allowed them to start businesses. He founded the Grameen Bank in 1983 to provide financial services to the poor who lacked access to traditional banking. Microfinance provides loans, savings, insurance and other services to low-income individuals and groups to help them become self-sufficient entrepreneurs. It aims to give the poor opportunities to earn sustainable incomes and improve their standards of living through small business ownership and access to capital. Studies show microfinance can encourage economic development by stimulating entrepreneurship and empowering the poor.

1. MICROFINANCE
Presented by,
Yogita Patil.
F.Y.MMS

2. History of microfinance
•
In 1976, Muhammad yunus
(Nobel Peace Prize Winner
2006) noticed that small
amounts of loans could make
a big impact on the poor
peoples’ lives.
•
Grameen Bank, ("Bank of the
Villages", in Bangla) was
founded
in
1983,
was
supported by the central bank
of Bangladesh.

3. ◦ "Poverty is the absence of all human rights.
The frustrations, hostility and anger generated
by abject poverty cannot sustain peace in any
society. For building stable peace we must find
ways to provide opportunities for people to live
decent lives."
◦
— Dr. Muhammad Yunus
Founder, Grameen Bank
Recipient of Nobel Peace Prize -2006

4. Definition of 'Microfinance'
A type of banking service that is provided
to unemployed or low-income individuals
or groups who would otherwise have no
other means of gaining financial services.
 Ultimately, the goal of microfinance is to
give low income people an opportunity to
become self-sufficient by providing a
means of saving money, borrowing money
and insurance.


5. DEFINITION OF MICROFINANCE or
microcredit
◦ MICROFINANCE: Financial services to
low-income individuals who do not have
access to normal banking services.
Microcredit is one of the financial services
offered.
◦ MICROCREDIT: The lending of small
amounts of money at low interest to
individuals and/or new businesses in the
developing world. (Oxford Dictionaries
Online)

6. HOW DOES MICROFINANCE AID IN ECONOMIC
DEVELOPMENT?
• Encourages
entrepreneurship
and
independence from government aid and/or
subsidies
• Provides “poor” people the opportunity to earn
sustainable income which in turn allows for a
better standard of living
• Increases in disposable income can lead to
future development and growth
• Has a positive influence on social indicators—
education, health, nutrition)
• Empower the poor which can correlate directly
with political democracy and economic
development

7. Why do poor people need for financial
service?
Lifecycle Needs: such as weddings, funerals,
childbirth, education, homebuilding, widowhood,
old age.
 Personal Emergencies: such as sickness, injury,
unemployment, theft, harassment or death.
 Disasters: such as fires, floods, cyclones and
man-made events like war.
 Investment Opportunities: expanding a business,
buying land or equipment, improving housing, etc.


8. Money market:
• New concept, to expand the breadth of micro-finance.
• Useful in remote areas, where banking facilities do not
exist.
• Touted as being better for development than macro
aid.

9. conclusion
• Emerging markets are doing very well right now
• Good from an investor's point of view (high returns,
diversification)
• Feel-good investment
• Untapped potential