ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is Microcredit? Microcredit is a common form of microfinance that involves an extremely small loan given to an individual to help them become self-employed or grow a small business. These borrowers tend to be low-income individuals, especially from less developed countries (LDCs).

Detailed explanation-2: -Microfinance refers to the financial services provided to low-income individuals or groups who are typically excluded from traditional banking. Most microfinance institutions focus on offering credit in the form of small working capital loans, sometimes called microloans or microcredit.

Detailed explanation-3: -Microcredit is a small loan provided to low-income individuals/groups or those who lack a steady source of income. Micro credit loans are given to help small entrepreneurs who otherwise do not have the financial means to kickstart their entrepreneurship journey.

Detailed explanation-4: -Microcredit helps in the alleviation of poverty, employment, entrepreneurship, higher productivity from agriculture, women empowerment, gender equality, reduced rural outmigration, better health and education, green entrepreneurship, and adoption of modern technology/inputs in agriculture.

Detailed explanation-5: -Microcredit is essentially a non-profit approach to development and depends on external support, while microfinance programmes seek to return enough profit to be self-financing. Thus, the two programs need to be treated separately in relation to their role in the alleviation of Third World poverty.