More about microfinance
Microfinance is seen as a long-term and sustainable way to provide the necessary funding to help people in developing countries to work and become self-sufficient. It is best thought of as a hand up, rather than a handout.
It refers to provision of small loans to low-income business owners, but also other basic financial services such as savings, insurance, and money transfer. It quite often also involves training in financial literacy and business.
A loan is typically between £100-£500 and the requirement of physical collateral for traditional lenders is replaced by a system of collective guarantee (or solidarity) groups. Alternatively, two personal guarantors may be required, which can even be respected community leaders.