What is a 'Microcredit'

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

Also known as "microlending" or "microloan".

BREAKING DOWN '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. Term Loan

    A loan from a bank for a specific amount that has a specified ...
  2. Call Loan

    A loan provided to a brokerage firm and used to finance margin ...
  3. Direct Consolidation Loan

    A loan that combines two or more federal education loans into ...
  4. Renegotiated Loan

    The result of an agreement between a borrower and a lender to ...
  5. Future Advance

    A clause in a mortgage which enables the lender to advance funds ...
  6. Loan Stock

    Common or preferred stock shares that are used as collateral ...
Related Articles
  1. Small Business

    Improve Your Karma With Microlending

    Not all businesses are self-sustaining - many rely on microlending in order to survive.
  2. Personal Finance

    Why Women Have More Student Debt

    A new research study shows that women carry more student loan debt than men.
  3. Tech

    Do Women Need ‘Women-Focused’ Financial Advisors?

    Their life experiences are different from men’s – and their earnings tend to be lower – but does that mean women should be treated differently?
  4. Managing Wealth

    How To Get A Business Loan If You Have Bad Credit

    Your business' credit standing may be less than stellar, but you can still get financing. We show you how.
  5. Financial Advisor

    Why Retirement Planning Differs for Women

    Women face unique challenges when it comes to saving for retirement compared to men. Here's why and how to better prepare.
  6. Personal Finance

    The Unique Ways Women Approach Finance

    Understanding gender differences and how they are changing is fundamental to understanding the investing world.
  7. Financial Advisor

    Are Women's Portfolios Better Than Men's?

    A recent study found that women's portfolios tend to perform better than men's. This is likely because women are more averse to risk.
  8. Personal Finance

    What Women Want From A Financial Advisor

    Women's wealth is increasing and so is their need for a solid financial plan. Savvy advisors should be taking advantage.
  9. Personal Finance

    Understanding Term Loans

    A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate.
  10. Retirement

    Business Owners: A Guide To Qualified Retirement Plan Loans

    Thinking of adding a loan feature to your company's plan? Here's what you need to know.
RELATED FAQS
  1. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
  2. What's the average salary of a loan officer?

    Read about the average yearly salary for a loan officer. Learn about what these professionals do and what determines their ... Read Answer >>
  3. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
  4. What are the differences between delinquency and default?

    Find out more about loan delinquency, loan default, and the difference between a loan borrower defaulting and being delinquent ... Read Answer >>
Hot Definitions
  1. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  3. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  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. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center