Abstract:
Microfinance which is also
referred
to as
Microcredit is the extension of
loans to
entrepreneurs
whom are too poor to be qualified for the traditional bank
loan especially in developing countries. It enables very people to engage in self
-
employment project that generate income.
The concept of microfinance was developed by Muhammad Yunus, a U.S
educated professor of Economics, who first got in the business of fighting
poverty during the 1973 famine in his homeland of Bangladesh, one of the
poorest countries in the world. Yunus discovered that small
loans could make a
significant difference in a poor
person’s
survival. His first loan consisted of 27
dollars from his own pocket, which he lent to a woman who made bamboo
furniture, which she sold to support herself and her family
. In 1976, Yunus founded
the first micro-finance bank called the Grameen Bank, which provides
loan to the Bangladesh people. Since then it has issued more than a billion
dollars in loan to some 2.4 million borrowers.
