Views on a powerful force: Posted by charlsking on June 14th, 2007
The extension of the small loans to the poor, who don’t qualify for the traditional bank loan, can be called as Microcredit. These small loans give the poor a chance to develop their business as well as to develop them financially. In microcredit system money is given to the people many times when they need it and for this reason it helps to generate monetary transaction. Ultimately the economy gets the necessary boost.
This program is better accepted by the poor women rather than the men because the women have proven to be the better manager of their loans; they pay them promptly most of the time. Naturally a woman is better controller of many things and it includes finance. Now they feel more confident about their future. They were suppressed either by others of by their husbands. Because most of the time they were dependent on them. Now as they earn their own livelihood and also help their child’s education, they feel comfortable and confident.
Some features of microcredit program:
Evaluating credit as a human right.
Helping poor families to overcome poverty by their own help.
Getting loans on trust.
Creating its own methodology for maintainance, not following the normal banking system.
Encouraging self employment.
Bringing the bank to the people to provide financial help.
Continuous flow of funds if paid in time.
Voluntary saving programs to the poor borrowers.
Availability of concurrent or simultaneous loans to the borrower.
Interest rates at lower than normal rate.
Giving high priority to establishing social capital and promotes education.
It also creates concern about the environment.