What is Microlending?
Microlending is an interesting approach to trying to encourage self-sufficiency and end poverty especially in developing countries. The idea may have been first begun in Bangladesh, and it is now a popular one. Essentially, very small amounts of money are lent to usually very poor people, who have at present, little way to pay the loans back. These people are often called fledgling entrepreneurs because with a small loan they may be able to start a successful business, repay their loan eventually, and raise their income status dramatically. There are for profit companies that practice microlending, but many companies are not for profit. A certain amount of interest is charged to keep the company working, but beyond that, non-profit types don’t hope to make huge amounts of money on loan transactions. Instead, most merely hope to help people who would otherwise be unable to get a loan, and this help though small and minute, can make a huge a differences. Though the majority of microlendi
Microlending is the act of extending loans to clients of Microenterprise Development Organizations. Microlending was born because traditional banks are not always willing to accommodate very small business loan requests or compensate for individuals whose credit may not be perfect. Many Microenterprise Development Organizations manage their own loan programs designed specifically to fund business ventures. There are a variety of programs that make loans as small as $500 and up to $35,000 (funding parameters vary by program).
Microlending (commonly referred to as micro-lending, micro-finance, or microfinance) represents the granting of loans that are particularly small in size. Typically, such microloans are granted to people who are unemployed, poor entrepreneurs or living in poverty and consequently not considered bankable.
