Educating Social Entrepreneurs, Volume II

CHAPTER 25

Microfinance: Models and Implications for Social Entrepreneurship

Wonhyung Lee

University at Albany, State University of New York

Introduction

The influence of microfinance¹ on delivering an array of financial services to low-income people has grown around the globe. Conventionally, microfinance used to refer to “a financial mechanism through which formal or informal financial institutions make very small loans (‘microcredit’) to the entrepreneurial working poor (‘microentrepreneurs’) to start, maintain, or expand small businesses (‘microenterprises’)” (Carr and Tong 2002). More recently, however, the microfinance industry provides broader products and services, including consumer loans, savings, insurance, and money transfers for ...