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What Is Microfinance?
Microfinance is a source of financial services for entrepreneurs
and small businesses lacking access to banking and related
The two main mechanisms for the delivery of financial services
to such clients are:
(1) relationship-based banking for individual entrepreneurs and
small businesses; and (2) group-based models, where several entrepreneurs come
together to apply for loans and other services as a group.
In some regions, for example Southern Africa, microfinance is used to describe the supply of financial
services to low-income employees, which is closer to the retail finance model
prevalent in mainstream banking.
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