Funding Sources for Microfinance Banks
Funding Sources for Microfinance Banks Funding sources for microfinance banks are regulated and the need to adhere to regulatory provisions cannot be over emphasized. WHAT IS MICROFINANCE Microfinance refers to the financial services provided to low-income individuals or groups who are typically excluded from traditional banking Most microfinance institutions focus on offering credit in the form of small working capital loans, sometimes called microloans or microcredit. Sources from funding sources for ease of understanding. #A Shareholders’ funds (Paid-up share capital and reserves) : This is the owners’ equity. The funds put together by the owners verified and approved by CENTRAL BANKS. It usually comes at no cost to the business. #B Deposits/Savings of customers: As operation progresses, the business is expected to generate cashflow through the sale of products and services designed for customers. Here, products can be designed to attract savings, deposit with fixed term and i