Microcredit

AAA

DEFINITION of 'Microcredit'

An extremely small loan given to impoverished people to help them become self employed.

Also known as "microlending" or "microloan".

INVESTOPEDIA EXPLAINS 'Microcredit'

Renee Loth wrote an article in 2002 for the Boston Globe entitled "Women Entrepreneurs," which explores how this type of loan possibly originated. In the article Loth suggests the system started in Bangladesh in 1976, when an economics professor loaned a group of women $27 to finance their own small business. Amazingly the women repaid the loan and were able to sustain the business.

RELATED TERMS
  1. Credit

    1. A contractual agreement in which a borrower receives something ...
  2. Credit Card

    A card issued by a financial company giving the holder an option ...
  3. Microeconomics

    The branch of economics that analyzes the market behavior of ...
  4. Microfinance

    A type of banking service that is provided to unemployed or low-income ...
  5. Microinsurance

    Insurance products that offer coverage to low-income households. ...
  6. Microenterprise

    A small business that employs a small number of employees. A ...
Related Articles
  1. Microfinance: What It Is And How To ...
    Entrepreneurship

    Microfinance: What It Is And How To ...

  2. Improve Your Karma With Microlending
    Entrepreneurship

    Improve Your Karma With Microlending

  3. An Introduction to Microfinance
    Insurance

    An Introduction to Microfinance

  4. Social Finance Careers: Creating A Better ...
    Entrepreneurship

    Social Finance Careers: Creating A Better ...

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center