BANKING AFFAIRS

Detailed explanation-1: -Micro Loans is a financial service aimed at providing small loans to low-income individuals and making them self reliant. These individuals can find support from Micro Loans lenders.

Detailed explanation-2: -Microfinance is a banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. Microfinance allows people to take on reasonable small business loans safely, and in a manner that is consistent with ethical lending practices.

Detailed explanation-3: -As per the RBI, a ‘small borrowal account’ (SBA) is defined as an account having a credit limit of up to ₹200, 000 (₹25, 000 till 1998 and ₹10, 000 till 1983). The holders of these accounts are individuals/entities who have relatively small credit/borrowal requirements.

Detailed explanation-4: -A microfinance institution specialises in banking services for low-income individuals and groups. These institutions access financial resources from mainstream financial entities and provide support service to the poor.

Detailed explanation-5: -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.