Microfinance and its limitations

Table of contents

• Limitations of microfinance
• Benefits of microfinance
• Moving on from microfinance

Article summary

Banking and Finance analysis: Microfinance is a type of banking service that offers financial services to low-income individuals and businesses who otherwise would not have the opportunity to access credit. However, recent research from the European Bank for Reconstruction and Development (EBRD) has indicated that simply providing access to microcredit does not lead to a substantial increase in household income. Alyssa Fu, summer intern at P.R.I.M.E. Finance and Camilla Macpherson, head of secretariat at P.R.I.M.E. Finance consider the benefits and limitations of microfinance.