BANKING AFFAIRS

Detailed explanation-1: -Microfinance, also called microcredit, is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services.

Detailed explanation-2: -Microfinance is a form of financial service which provides small loans and other financial services to poor and low-income households.

Detailed explanation-3: -without collateral would be treated as microfinance loans? Ans. All collateral-free loans to individual/s belonging to low-income households, i.e., households having annual income up to ₹3, 00, 000 are treated as microfinance loans.

Detailed explanation-4: -Like a bank, a microfinance institution is a provider of credit. However, the size of the loans are smaller than those granted by traditional banks. These small loans are known as microcredit. The clients of an MFI are often microentrepreneurs in need of economic support to launch their business.