What is a microfinance institution (MFI) ( N°6 )
A microfinance institution (MFI) is generally a nonprofit, non-government organization that extends loans to the poor for income generating activities. There are thousands of MFIs worldwide making loans to millions of poor, self-employed borrowers. A microfinance institution (MFI) is an organization that provides financial services to the poor. This very broad definition includes a wide range of providers that vary in their legal structure, mission, methodology, and sustainability. However, all share the common characteristic of providing financial services to a clientele poorer and more vulnerable than traditional bank clients. Historical context can help explain how specialized MFIs developed over the last few decades. Between the 1950s and 1970s, governments and donors focused on providing subsidized agricultural credit to small and marginal farmers, in hopes of raising productivity and incomes.
