I’ve been googleing but I’m trying to pull myself out of a rabbit hole. I don’t see these institutions prominent in my country – where are they? And the pros and cons of them seem to be in theory? Like there aren’t news stories accompanying them
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Microfinance is when you make loans of far smaller dollar amounts than any normal bank would be interested in making. For example, if you need $100 to buy materials for your shirtmaking business, you would struggle to find a bank that would make that loan. Microlenders step in to fill that gap.
They aren’t really “good” or “bad” – the just have pros and cons. They are able to get folks otherwise cut out of the finance sector access to loans, but as with all loans, they can trap people in debt cycles an some lenders are abusive.
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