Not everyone has a lot of money. Some people earn so little no matter how hard they work while a few lucky ones get to enjoy more money than they can ever spend in their lifetime. Even if the majority of us labor in companies or institutions, it still won’t make you rich. Most successful people in the world are entrepreneurs and it is also the reason why many also want to give business a try today and build their own start-ups. Who knows, it might get bigger someday and they may eventually fulfill all their life’s dreams. And since not everyone qualifies for bank loans to fund their business projects, the next best thing for aspiring entrepreneurs to do is to secure loans or other related financial services to get started. The concept of microfinancing has been very popular for quite some time since loan applicants no longer have to secure collaterals in order to get the money they need. But because of the very nature of this small industry being highly vulnerable makes microfinancing more fragile these days. Any small changes in the market or the economy, in general, can have a major effect on microfinanciers, unlike banks that have various products to offer to the public.
Otherwise known as microcredit, many low-income people benefited from microfinancing and have helped them overcome poverty at the very least but this industry is likewise struggling right now since banks have expanded what they offer when it comes to issuing loans and the global economy hasn’t really fully recovered yet. This is evident in countries like India where we all know has one of the world’s largest population and a big chunk of this is mostly below or on the poverty line.
(Via: http://www.brecorder.com/2017/09/29/372124/growth-continues-for-microfinance/) There are microfinance industries that are doing well and some that aren’t. It probably has to do with the location and the current status of the economy in that place. That of India may be suffering but not that of Pakistan. The market is growing and because of the technology that we have today, many (especially Millennials) are more interested in starting their own businesses rather than get stuck with a conventional 9-5 job that does not really bring home the bacon. There is really no winning formula on a lot of things in life. Even established institutions like banks and even lenders go through so many changes as the world becomes increasingly digital and may struggle in the process. In a way, technology helped with efficiency. We’ll just have to wait whether the world of microfinancing will keep on forging forward or get swallowed whole by banks that are coming up with more clever ways to lure in more investors and borrowers. Is Microfinance About To Go Down Or Not? Read more on: https://www.keatingeconomics.com/ via https://www.keatingeconomics.com/is-microfinance-about-to-go-down-or-not/
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