Microfinance Solutions initially had limited definition – provision of micro loan to the poor entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients were:
- Relationship-based banking for individual entrepreneurs and small businesses.
- Group-based models, where several entrepreneurs come together to apply for loans and other services as a group.
Over time, Microfinance has emerged as a larger movement whose object is “a world in which as everyone, especially the poor and socially marginalized people and households have access to wide range of affordable, high quality financial products and services, including not just credit but also savings, insurance, and fund transfers”.
Many of those who promote microfinance generally believe that such access will help poor people out of poverty, including participants in the Microcredit Summit Campaign. For many, microfinance is a way to promote economic development, employment and growth through the support of micro-entrepreneurs and small businesses; for others it is a way for poor to manage their finances more effectively and take advantage of economic opportunities while managing the risks. The terms have evolved – from micro-credit to micro-finance, and now ‘financial inclusion’.
In this context the main features of microfinance solutions are:
- Loan given without security.
- Loans to those people who live below the poverty line.
- Members of SHGs may benefit from microfinance.
- Maximum limit of loan under micro finance Rs.25,000/-
- Terms and conditions offered to poor people decided by NGOs.
- Microfinance is different from Microcredit- under the latter, small loans are given to the borrower but under microfinance alongside many other financial services including savings accounts and insurance. Therefore, microfinance has a wider concept than microcredit.
Which IT microfinance solutions use?
If you are looking for IT microfinance solutions for your banking establishment, Abhyutthanam Digital can help you to choose the ones that can fit the needs of your business. As a specialist of the information technology tools for banks and financial institutions, we propose several solutions that are efficient, safe, and provided with functionalities that can be personalized.
The advantages of microfinance services:
The microfinance movement is transforming the way that banking services are delivered to people and organisations that may not normally have access to such services. This new phenomenon can be a significant force for good, fostering the creation of businesses and wealth where it was not possible before. Most of the focus is on lending but many microfinance institutions also offer a range of other banking services. The microfinance institutions may be smaller and the market niche new but they still need to access the very best in banking software. Abhyutthanam Digital microfinance solutions allow them to do just that.
The power of our microfinance solutions:
Risk management capabilities built into the system, which places the client at the centre of all operations. There is real time interoperability across all access channels, such as web, telephone or branch, and the built-in workflow system manages all credit applications throughout the entire process. In short, Abhyutthanam Digital microfinance solutions bring the power of the most sophisticated and innovative major banking applications right into the reach of any microfinance institution, no matter the size of business. In doing so, Abhyutthanam provides its microfinance institution clients with the tools they need to run their businesses effectively and profitably and with the proper governance at all times.