Microcredit and Microlending

Microcredit, or the provision of small loans to poor borrowers, has become a key development initiative in the Global South. The success of the Grameen Bank has demonstrated that providing credit to the poorest of society is realistic and feasible. Where traditional banks failed, the emergence of microfinance institutions serves to meet the credit needs of the poor using group and individual lending models. The majority of microcredit programs aim to reduce poverty and empower women, the subject of numerous impact studies. While microcredit serves the needs of the poor in accessing credit, there is a need for a more holistic approach. Future directions call for integrated and comprehensive approaches that include microcredit and microlending along with social protection floor initiatives, cash grants, microinsurance, education, health and social services.