Microfinance lending

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Here are six ways ADB is using the power of microfinance to level the financial playing field for poor communities across the region: A review of the academic literature leads us to posit that Microfinance in developing countries has followed three key trends: 1.) A shift in lending methods: from group to individual lending; 2.) A change in the purpose of loans, broadening of product offerings, and the use of new technologies; and, 3.) The diversification of funding sources and changes in organization type. Today’s column looks at this in brief. Further, the push for microfinance lending as part of plans to re-stimulate the economy could leave borrowers impoverished by expensive debt through a period of uncertain employment. Existing and micro microfinance pose a serious threat to poor women. Microfinance provides access to capital for individuals who are financially underserved. If microfinance institutions were not offering loans to this segment of the society, these groups would have resorted to borrowing money from friends or family members. The probability of them opting for fast cash loans or payday advances (that bear huge interest rates) are also high.