16MICROLOANS

A relatively recent financing product developed to provide assistance to small enterprises with limited access to capital is known as microcredit. Inspired by the first modern microcredit operation, Grameen Bank, founded in Bangladesh in 1976 by Nobel laureate Muhammad Yunus, microcredit has steadily gained popularity across the world.

Microcredit was created as a tool to empower people to escape poverty with entrepreneurship. Microloans are smaller loans made with liberal terms that enable people to create or grow their own business enterprise. In its original form, loans of $100 to $250 were not unusual, given that developing economies were easy to enter with much less capital. Some of these programs also required a microsavings ...

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