Microfinance is usually understood to entail the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. The two main mechanisms for the delivery of financial services to such clients are (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group.

In some regions, for example Southern Africa, microfinance is used to describe the supply of financial services to low-income employees, which, however, is closer to the retail finance model prevalent in mainstream banking.

For some, microfinance is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers." Many of those who promote microfinance generally believe that such access will help poor people out of poverty. For others, microfinance is a way to promote economic development, employment and growth through the support of micro-entrepreneurs and small businesses.

Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Although microcredit is one of the aspects of microfinance, conflation of the two terms is endemic in public discourse. Critics often attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few studies have tried to assess its full impact.

Read more about Microfinance:  History of Microfinance, Microfinance Standards and Principles, Scale of Microfinance Operations, Microfinance in The United States and Canada, "Inclusive Financial Systems", Microcredit and The Web, Evidence For Reducing Poverty, Microfinance and Social Interventions, Criticism, Bibliography

Other articles related to "microfinance":

Microfinance - Bibliography
... The Economics of Microfinance, The MIT Press, Cambridge, Massachusetts, 2005 ... Striking the Balance in Microfinance A Practical Guide to Mobilizing Savings ... What’s Wrong with Microfinance? Practical Action, 2007 ...
... is an initiative of the Grameen Foundation and the financial software that it produces for the microfinance industry ... The software provides key functionality for microfinance institutions client management, portfolio management, loan repayment tracking, fee and ... rather than an acronym.) The product is supporting more than 850,000 microfinance clients across 28 microfinance institutions as of June 2011 and continues to grow its presence across the globe ...
SKS Microfinance
... SKS Microfinance Limited (SKS) is a non-banking finance company (NBFC), regulated by the Reserve Bank of India ... According to a CRISIL Report on Top 50 Indian Microfinance Institutions (MFIs), SKS Microfinance is the largest MFI in India with more borrowers, more branches and more loans as ... India and other parts of the world and also to create a commercial microfinance model that delivers high value to our customers" ...
Microfinance Insights
... Microfinance Insights is an international print magazine, published quarterly ... in-depth analyses and commentary on the Microfinance sector, updates on the latest trends, and profiles of global sector players ... Each issue focuses on a theme from the microfinance sector ...
Solidarity Lending - Application
... Solidarity lending is widespread in microfinance today, particularly in Asia ... The Microbanking Bulletin tracks solidarity lending as a separate microfinance methodology ... Of 446 microfinance institutions worldwide that it was tracking at the end of 2005, 39 lent only through this method, while another 205 used a mix of solidarity and individual lending ...