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Transitioning to low-carbon electricity generation

Microfinance

Poverty and entrepreneurship in developing countries

Providing credit to poor households in developing countries has been a major challenge in recent years. Shabbir Dastgir examines the advantages and disadvantages of microfinance as a possible solution to this problem

Microfinance loans recognise the important role played by women in rural communities

provision of credit, less-developed countries, microfinance initiatives

Microfinance is a form of retail banking service that offers small loans and deposit facilities for unemployed or low-income people. It is primarily used in developing countries, for those who cannot access conventional financial services because they lack sufficient collateral or security for the repayment of a loan. Borrowers are often poor, small groups and low-key entrepreneurs seeking loans of two or three times their income. They lack regular earnings or employment and their credit history can be difficult to verify. Lenders — microfinance institutions (MFIs) — empower them to become self-reliant by agreeing informal lending arrangements, emphasising skills and enterprise rather than charitable donations. Borrowers typically repay on time — estimates suggest almost 90% of loans are honoured.

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Transitioning to low-carbon electricity generation

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