Microfinance
Microfinance is a financial service concept that provides small loans, savings accounts, insurance, and other basic financial products to low-income individuals or groups who lack access to traditional banking services. It aims to promote financial inclusion, reduce poverty, and empower underserved communities by enabling entrepreneurship and economic self-sufficiency. Key institutions include microfinance institutions (MFIs), credit unions, and non-governmental organizations (NGOs) that operate in developing and developed regions.
Developers should learn about microfinance when working on fintech, social impact, or financial inclusion projects, as it involves designing and implementing digital platforms for loan management, mobile banking, and credit scoring in resource-constrained environments. It is used in applications like peer-to-peer lending apps, micro-insurance systems, and community-based savings programs, often leveraging technologies such as mobile money and blockchain to enhance accessibility and transparency. Understanding microfinance helps in creating solutions that address real-world economic challenges and comply with regulatory frameworks in emerging markets.