00:02
So, in this question let us discuss 5 microfinance models and let us try to give relevant examples to support the discussion.
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So, microfinance refers to the provision of financial services such as small loans, savings accounts, insurance and financial education to low income individuals.
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So, all kinds of financial services low income individuals or underserved populations who lack access to traditional banking services.
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There are various microfinance models that have been developed to address the specific needs of these individuals and communities.
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Here are 5 microfinance models with relevant examples.
00:51
The first one is grameen model, it is also called group lending.
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So, the grameen bank founded by muhammad yunus in bangladesh pioneered the concept of group lending.
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In this model borrowers from small groups and are collectively responsible for each other's loans.
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If one member defaults the other group members are not eligible for other loans.
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This approach promotes social accountability and support among group members.
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For example, grameen bank provides small loans to groups of women who want to expand their business and improve their economic status.
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Second example is self -help group, self -help group in short for shg model.
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So, self -help groups are community based organizations comprising of individuals from similar socio -economic backgrounds.
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Members pool their savings which are then used to provide loans to members.
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Shgs often support, often receive support and training from ngos or financial institutions...