Policies in Microfinance
Microfinance is a financial term that describes the provision of services for poor and low-income clients. Microfinance institutions are businesses that use microfinancing to provider relatively small loans and other financial services to people who fit into these categories.
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Range of Institutions
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One policy of microfinance is the goal of reaching millions of poor and low-income people. This policy aims to offer financial services to the poor offering them opportunities they normally could not have without the funding. Most institutions utilizing this system offer loans without requiring collateral.
Standards
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Standards for microfinance institutions require state microfinance institutions to meet high standards of performance. Standards also are designed for these institutions to integrate into the domestic financial system. These standards are also designed to make high quality services accessible to all people, offering low-income people a way to improve their quality of life.
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Favorable Support
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Another policy of microfinance is that institutions meeting high standards are given favorable policies toward capital and loan funds. They are also given greater financial access allowing these institutions to grow.
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