"Microfinance is the supply of loans, savings, and other basic financial services to the poor." (CGAP)

History

The general concept of microfinance is believed to have been in existence for centuries. Savings and credit groups that have operated during those periods include the "susus" of Ghana, "chit funds" in India, "tandas" in Mexico, "arisan" in Indonesia, "cheetu" in Sri Lanka, "tontines" in West Africa, and "pasanaku" in Bolivia, as well as numerous savings clubs and burial societies found all over the world. The origin of ‘modern’ microfinance is usually credited to Dr. Muhammad Yunus, the founder of the Grameen Bank in Bangladesh, who in 1976 designed an experimental credit programme to offer financial services and entrepreneurship opportunities to poor people.

"Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure as we are doing in Bangladesh, and you will see that the poor change their own lives. Grameen's experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives." - Banker to the Poor - Muhammad Yunus, Grameen Bank, Founder