A microfinance institution (MFI) is an organization that provides financial services such as loans, savings, and maybe even insurance to micro-entrepreneurs and/or unbanked people. A MFI can operate as a nonprofit like a non-government organization (NGO), credit cooperative, non-bank financial institution (NBFI), or even a formal, regulated for profit bank.
Most MFI’s provide microcredits to micro-entrepreneurs of low-moderate income in the areas where they operate. Some provide additional financial services such as insurance, micro mortgages, saving programs, as well as social, health and small business training.
MFIs differ in size and reach; some serve a few thousand clients in their immediate geographical area, while others serve hundreds of thousands, even millions, in a large geographical region, through numerous branches. Many MFIs offer services beyond loans and savings, including education on business and financial issues and social services focused on health and children.Read More