What Are Your Different Options While Seeking Microfinance?

Microfinance is generally targeted for the economically backward class to support them financially. The different types of microfinance and micro-credit options include availing small loans, small credits, savings, insurance policies, and others. These can be availed depending on the person’s objective and intended outcome.

This article details out some of the different options and microfinance schemes that a person can avail under microfinance and micro-credit options.

  1. Small Loans – These small amount loans will suffice the basic needs of those who are financially weak. The advantages of availing a small loan are that these require no credit history or collateral. Moreover, the loan repayment terms and rates are attractive.

  2. Savings – These help people to accumulate cash and assets, which can be used at a later stage for any business purpose or personal needs. Additionally, people can interest on their savings.

  3. Insurance Schemes – Several insurance schemes are available for the households under a low-income level, for example, life insurance, medical insurance, educational concessions, and others.

Apart from the above-mentioned financial options, several non-financial inputs are available that are intangible and add value to a person’s skills and capabilities. These include:

  1. Skills Training – For example, women can undertake special skills training in tailoring, crocheting, computers, childcare, and others to start a career in the respective fields.

  2. Marketing – Although several products and brands enter the market, it is through the efforts of the brand and product marketing that makes the business successful. Hence imparting appropriate training in the subject of business marketing can help build a strong career.

  3. Health Services – Good health services to the public will help prevent and reduce communicable and non-communicable diseases, thereby increasing the health standards of all the people. This will encourage them to live better and strive for a decent means of living.

  4. Educational Services – This is one of the most important skills that can be imparted to those who live in poverty. Good educational services can alleviate the living conditions of those living in an economically backward society.

  5. Organisational Support – Many of the advanced and profitable business companies can engage with the economically poor communities with the company’s CSR (Corporate Social Responsibilities) activities to enable them to live independently.

Some of the additional contributors of microfinance include:

  1. Traditional financial institutions such as banks and post offices

  2. Other financial service providers such as moneylenders, savings collectors, mortgage brokers, and others

  3. Organisations owned by people such as self-help firms and credit unions

  4. Non-governmental organizations or not-for-profit organizations