The business or policy of making microloans to impoverished entrepreneurs. Also called microlending.
* * *▪ financealso called microbanking or microfinancea means of extending credit, usually in the form of small loans with no collateral, to nontraditional borrowers such as the poor in rural or undeveloped areas. This approach was institutionalized in 1976 by Muhammad Yunus (Yunus, Muhammad), an American-educated Bangladeshi economist who had observed that a significant percentage of the world's population has been barred from acquiring the capital necessary to rise out of poverty. Yunus set out to solve this problem through the creation of the Grameen Bank in Bangladesh. The Grameen approach is unique because the small loans are guaranteed by members of the borrower's community; pressure within the group encourages borrowers to pay back the loans in a timely manner. Grameen's clients are among the poorest of the poor, many of whom had never possessed any money and relied on a barter economy to meet their daily needs. Using microloans, borrowers are able to purchase livestock or start their own businesses. By 1996 Grameen had extended credit to more than three million borrowers and was the largest bank in Bangladesh, with more than 1,000 branches.The success of microloans in Bangladesh led to similar programs in other less-developed nations, including Bolivia and Indonesia. Some are sponsored by foundations, religious organizations, or nongovernmental organizations such as Opportunity International and the Foundation for International Community Assistance. In 2008 the Mexican bank Compartamos was criticized for parlaying its microlending program into a profit-making operation, charging high interest rates widely regarded as usurious. An alternative approach to Grameen-style lending is stepped lending, in which a borrower begins with a very small loan, repays it, and qualifies for successive loans at higher values.Yunus wrote on poverty for the Encyclopædia Britannica (see Sidebar: The Battle Against Poverty).
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microcredit — UK US /ˈmaɪkrəʊˌkredɪt/ noun [C or U] ► ECONOMICS, FINANCE a very small loan to individual people or families, for example in developing countries, especially in order to start a business: »The bank is setting up a microcredit program for poorer… … Financial and business terms
microcredit — /mīˈkrō kre dit/ noun The provision by banks of small business loans to borrowers with low income or no collateral ORIGIN: ↑micro (1a) … Useful english dictionary
Microcredit — This article is specific to small loans. For financial services to the poor, see Microfinance. For small payments, see Micropayment. Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur… … Wikipedia
Microcrédit — Le système d aide sociale appelé microcrédit consiste généralement en l attribution de prêts de faible montant à des entrepreneurs ou à des artisans qui ne peuvent accéder aux prêts bancaires classiques. Le microcrédit se développe surtout dans… … Wikipédia en Français
microcredit — (MY.croh.cred.it) n. A loan program that offers small, short term loans to help people become self employed. Also: micro credit, micro credit. Example Citation: Microcredit got its start in Bangladesh in 1976, when Muhammad Yunus, an economics… … New words
microcredit — [[t]ma͟ɪkroʊkredɪt[/t]] N UNCOUNT Microcredit is credit in the form of small loans offered to local businesses, especially in developing countries. [BUSINESS] ...a microcredit scheme which provides credit to small businesses … English dictionary
microcredit — labai maža paskola statusas Aprobuotas sritis smulkusis ir vidutinis verslas apibrėžtis Paskola verslininkui ar labai mažai įmonei (mikroįmonei) iki 86 320 litų dydžio. atitikmenys: angl. microcredit ryšiai: sinonimas – mikrokredìtas šaltinis… … Lithuanian dictionary (lietuvių žodynas)
Microcredit — … Википедия
microcredit — noun a) The practice of making very small loans, especially to poor people to promote self employment; microlending. b) A microloan … Wiktionary
Microcredit — An extremely small loan given to impoverished people to help them become self employed. Also known as microlending or microloan . Renee Loth wrote an article in 2002 for the Boston Globe entitled Women Entrepreneurs, which explores how this type… … Investment dictionary