Microcredit is the scheme which is introduced to benefit the small level borrowers. In this scheme there is an extension of small loans which is offered to the small level borrowers.
To whom these loans are applied
Usually these loans are offered for those parties who are typically impoverished and lack any collateral or steady employment. Moreover even if they do not possess any verifiable history of credit, they can be benefitted from this loan and credit scheming. Basically the design and development of the microcredit scheme is not found applicable to the support of entrepreneurship or in alleviation of poverty. However there are many cases when these schemes are used in the empowerment of women and providing them favorable chances of employment.
Uses of microcredit
Basically the purpose of microcredit schemes is to provide uplift on economical grounds to the underdeveloped and less empowered class of the society. With the help of these schemes, it is possible to raise the economic standards of the low profile classes of the society. There are many communities where women and sometimes lower class men as well lack the proper economic support. Such people are empowered by the economic uplift and help in the form of microcredit scheme. It is designed not only to support entrepreneurship and alleviate poverty, but also in many cases to empower women and uplift entire communities by extension.
Status of microcredit
Basically the microcredit schemes offered at different levels during different times of a fiscal year are made the integral part of the microfinance schemes. This offer provides new and a vast range of financial services like the saving accounts especially to the poor people. The modern basis of microcredit scheme is laid down on the Grameen Bank Foundation in Bangladesh. This was the bank which introduced and started the microcredit for the first time in the history of economics and finance all over the world. After that this offer was introduced by many banks and this subsequently became the world famous scheme. Later on other countries also adopted it to empower the poor lot in their region.
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- Return On Capital Employed (ROCE)
- Accounts Payable Turnover Ratio
- Debt Service Coverage Ratio
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