Many micro finance institutions have come up with programs for eradicating poverty. With the rise of globalization, the role of micro credit programs is increasing. Summits held at different points of time in various places lay stress on the need for better awareness among the poor of micro finance programs available to them.
These programs aim at extending financial assistance to the poor and needy on a long term basis. The role of micro credit programs in the alleviation of poverty cannot be denied. In many developing countries the majority of workers are below the poverty line and are mostly self-employed.
As such they do not have access to large loan amounts. To add to this problem, they are also less accessible to the financial institutions like banks which operate freely in developed countries. To address this problem, financial institutions have come up with systems for
providing financial assistance to the poor at the micro level.
It has also been observed that these micro credit institutions or micro finance institutions give more priority to women. In developing countries, woman are typically responsible for the healthy upbringing of their children and for taking care of the household.
Organizations and individuals who benefit from micro credit:
The role of micro credit institutions is vital to the financial sector of the economies of many countries. By improving the living standards of the poor families, the financial sector is benefited by the increase in the purchasing power of the individuals. In addition to individual households, others who benefit from the assistance provided by the micro finance institution include corporations from which individuals may now purchase, the media, guarantors, and donors.
There are several guidelines, which govern the micro finance institutions in different countries.
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