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According to the World Bank report close to 1.4 billion people in the different countries don’t have access to the financial service and that’s where Micro-financial Institution play a major role.
Goals of MFI’s:
- Assists the development of community which follow sustainable development.
- Providing resources to lower section of the society.
- Evaluation of option to end the poverty.
- Mobilize self-employment benefits to under privilege.
Features of MFI’s:
- It provides easy access to credit– people get money when it needed the most.
- It makes future investment possible– MFI’s provide the credit for constructing houses, health facility, better future opportunity.
- It served under financed section of society– it provides loans to women, unemployed man etc.
- It gives better education– families benefiting from micro loans, and improvement in family income imply that the children may not pull out from school for monetary reasons.
MFI’s shifted their focus from ruler urban areas to urban area, MFI’s have more client then rural area, from the latest data of self-regulating organization. Sadhana shows 67% of the 37 million customer lives in urban areas.
Reasons for Urban Shifting:
- The growth of urban portfolio is more than in rural area, as the density of population is much higher.
- Saving the cost of involved in searching new location.
- Per head employee cost is reduced as there is no need to travel for reaching customers.
- The cot of operation is much lower due to elimination of need for offices.