Microfinance is the provision of financial services (credit, savings, fund transfers, insurance) to the working poor in developing countries and countries in transition, who would not normally have access to such services. The large majority of these populations are effectively cut off from banking services.

And yet among these are an important number of micro-entrepreneurs, many of them women, for whom adequate savings and credit services would allow them to graduate from a situation in which they are consumed by their families’ day-to-day subsistence to one where they can participate in small businesses that generate longer-term growth and income. It is this expanding market that is targeted by microfinance institutions (MFIs), those specialized financial entities that seek to respond to these needs and to mitigate the incapacity, or the lack of interest, of the traditional banking sector to cover them. Recent studies estimate the size of this market at USD 250 billions, at a minimum, of which only one-tenth would be financed to date.

> Continue

The articles presented in this section have been written by SFG founders and published by The United Nations Environment Programme Finance Initiative for the launch of SFG association in October 2008.