Credit

Microcredit, one of the major components of microfinance, is the provision of working capital to increase the productivity of the world's poor majority. Very small loans for low-income borrowers with little or no collateral are provided by microfinance institutions or other legally registered banking authorities. The microcredit approach focuses on developing a successful repayment discipline and charging interest rates that cover the costs of credit delivery, both of which support development of sustainable institutions that can continue to expand their services in the future.