Question

3. Explain what is meant by microfinance and discuss the Systems view or approach to micro finance service delivery. Show how the approach enforces the believe that micro-finance is not just ‘banking’ but involves a mix of “business” and “development”

Answer 1

Micro financing

Micro financing is a financing program like the banks do but here there are some differents. Here it target the small businesses who does not have enough funds to run the business. Here it include small fianancing to the individual. In other words we can say these are not for large enterprises but for poor individuals who are facing poverty like that. For small businesses we know that it is very difficult for them to arrange the funds. So here the micrl financing will helps them for credit generation. Micro financing will provide them funds which will not be larger amount but they can conduct the business with these provided funds. This is the generl view anout the micro financing.

We can not say this is only a banking service. Here there is a business and this micro financing is not only providing the banking service. So we can not call them as banks only. Here we can see the hands of informal lenders. They will provide funds for some return. This is also a business and development. Development in the sense this is a developing method. Here the funds are utlising for the development purpose. Micro financing integrates the poor people to the large economy. They have the provisions to pay themselves. These can be considered as a business and so micro financing is not only a baking sector but also includes the business and the development mix.

ThankYou....