Microcredit facts for kids
A microcredit (sometimes called a micro-loan, or microloan) is a special kind of loan given to poor business people, mostly in developing countries. Microcredits were created to support entrepreneurship, and to lessen poverty. Very often, people getting a microcredit are illiterate: they cannot fill out forms to apply for a regular loan. Microcredits also work differently: the interest ot be paid is usually much higher than with a regular loan, often it is over 20%. The interest usually also has to be paid more often. Microcredits have been criticized, because people taking them often end up in a situation where they cannot repay their debt.
Images for kids
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Mumbai Headquarters of the National Bank for Agriculture and Rural Development of India, which on-lends funds to banks providing microcredit.
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Many microfinance institutions also offer savings facilities, such as Banco Palma in Brazil shown here.
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Nobel laureate Muhammad Yunus, the founder of Grameen Bank, which is generally considered the first modern microcredit institution
