Microfinance involves the use of small loans and savings to provide for people who are in need. The focus is mostly on helping people who are currently living in poverty to have a fair shot at getting out of it. They eventually become financially independent and won’t have to rely on solutions that don’t guarantee positive results. Here are some more benefits of microfinance.
The good thing about microfinance is that people who are unable to repay loans with higher interest rates now have an option that is more affordable. Banks and other major financial institutions are totally disinterested in helping these people especially if the interest rates are lower and the repayment scheme is more favourable for the borrower. Given the fact that a huge portion of the world’s population is living in poverty, having easier access to money can help them gradually move out of poverty.
Better education for children
When parents are not financially stable, they are unable to provide for the needs of their children. The lack of quality education makes the cycle of poverty endless. It is their chance to finally get out of poverty since good education can lead to better employment. With microfinance, it is possible for parents to have access to better education for their children.
There are a lot of people in this world who are without access to clean water and a safe environment. Worse, some people end up dying because they don’t have better health care access. This should not happen to people in need. With the help of microfinance, those who are in a difficult situation and are unable to get health care access can finally solve the problem.
The good thing about microfinance is that it does not work for short-term change. It is a key towards more financial stability. In the long run, more families can be pulled out of poverty because of the money that they have received. Imagine getting a loan that could be used as capital to start a business. No matter how small this amount is, it could lead to something better if used properly.
Since microfinance started, a lot of people have finally got the chance to climb out of poverty. They don’t even have to go through extensive background checks or hop from one financial institution to another just so they can get the money they need. Issues regarding loan applications and payments are also easily resolved online. The use of technology has made all transactions related to microfinance a lot easier.
Sharone Perlstein has been involved in microfinance and is an expert when it comes to every detail regarding this industry and how it has changed the world.