Microfinance

Micro finance also known as micro credit is a type of banking service which serves those who cannot afford the service otherwise. Like the unemployed and those in a low income group. It brings the essential services of finance like insurance, loans and savings in reach of the mentioned class which is not going to be able to gain access to such services otherwise, so this is a socially conscious attempt at making them independent and better off. To improve the standards of living for the masses which will thus, make the whole society better off.

Microfinance brings several benefits with it. It fights different dimensions of poverty. It increases the self-dependency of the poor, so that they can at least have security for the basic requirements of life. It increases the overall household incomes thus as mentioned earlier aims for the economy to be better off as whole. Micro finance is best for those who have the entrepreneurial abilities just not the startup capital or resources to initiate the first move and put their abilities at work. This service provides them with the start which can turn out to be life changing for the person itself as well as the whole society which would benefit from his/her ability.

The service of micro finance has its drawbacks too as it may be taken advantage of by the unemployed who then might not even look for jobs or poor who do not have any conviction to work. It can also increase the burden of debt if for some reason the needy who have taken money lose it, which would be a huge problem for them. Another thing which should be kept in mind is that it might not be available in locations which have a nomadic population thus can easily take off, in places with high dependency of one type of economic activity or where there is high life threatening disease rate.

So in short this social service of finance like everything has both the sides to be weighted.