Microfinance and Microcredit
- Microfinance is a much broader concept than microcredit and refers to loans , saving , insurance , money transfers, and other financial product targeted at poor and low-income people. Microcredit refers more specifically to making small loan available to poor people,especially those traditionally excluded from financial services, through programmes designed specifically to meet their particular needs and circumstance.
- All type of microfinance intermediaries (Cooperatives, Banks,MFIs,and NBFCs etc.) can provide microcredit and other microfinance products like saving, insurance, provident fund and pensions. NGOs intermediaries can provide microcredit service but cannot mobilize saving and cannot provide insurances , provident funds and pensions services because of legal status.
- Microcredit interventions is generally done for the socio-economics development of poor. But microfinance interventions act as socio-economic development of poor people as well as business propositions for MIFs.
