Microfinancing

What is Microfinancing?


Microfinancing is financial assistance to low-income individuals such as micro enterprise owners, farmers, and private and government employees who need financial services from microfinancing firms, rural banks, and development finance organizations. Typically, the term microfinancing refers to loans as Micro Enterprise Loan (MEL), Agri-Business Loan (ABL) and Salary Loan (SL). This type of financing is quite applicable in the Philippines.


Mostly, microfinancing refers to a progress in which low-income households have access to a range of high quality financial services to finance their income generating projects for additional working capital for micro enterprise, farm inputs for agricultural production, and for household expenses to stabilize individual consumptions. These are not limited to credit, but savings, insurance and money transfer are included differently in various microfinancing institutuions.


Mission and Visions


“Microfinancing mission and visions are to organize, strengthen and equip economically active poor with skills and capital that they become the main factor in economic development.” This is not only to emphasize what microfinancing with its mission and visions are, but to teach borrowers how to use their loan proceed properly to their income generating projects. Remember, labor and capital is primary factors of production, and high production touches economic development.


HOW MICROFINANCE OPERATES
MICRO LOANS