Microfinance

Description

Microfinance programming provides people with access to financial services such as credit, savings, and insurance, ensuring economic growth is broad-based and reduces poverty. Those struggling in developing countries often lack access to safe places to keep their savings, making it difficult to obtain credit to start and grow their businesses.

Use of Funds

Programs improve the quality and affordability of financial services; extend access to excluded populations such as women, people with disabilities, and those living in remote areas; and assist small-holder farmers and small-business entrepreneurs in selling their products by linking them with buyers and suppliers of goods and services.

Justification

• According to the World Bank, “Globally, about 1.7 billion adults remain unbanked—without an account at a financial institution or through a mobile money provider—56% of all unbanked adults are women.” These funds help close that gap.
• Today, microfinance institutions serve hundreds of millions of vulnerable borrowers. Access to financial services and the development of microenterprises are essential to the stable growth of developing countries.
• Access to capital for small and medium enterprises steadies personal incomes and communities, grows local markets, and helps pave the way to independence.
• COVID-19 led to the shutdown of many micro and small businesses, negatively affecting the global micro-lending market.