Changing Trend in Microfinance

Microfinance as it seen today was not same when it was started by Md. Yunus, a professor of economics in 1976. It was the “microcredit” at the start and was initiated from a small village of Bangladesh by providing credit to craftswomen who were struggling to deal with high cost borrowing in order to buy raw materials.

These crafts women used to borrow from local moneylenders but the interest rate charged by moneylenders was too high leaving negligible margin to those craftswomen. Md. Yunus, originally lent less than a dollar out of his pocket to each of a group of 42 poor families and found that they were capable of investing the money and paying back the loan near perfect reliability.

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