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Microfinance is a category of financial services targeted at individuals and small businesses who lack access to conventional banking and related services. It is fundamentally built on the idea that low-income individuals can be transformed into entrepreneurs if given access to small amounts of capital, often referred to as microloans or microcredit.
Microfinance serves as a vital economic engine for the global "unbanked" population by providing essential financial tools to those traditionally excluded from the formal banking sector. By offering small-scale loans, savings accounts, and insurance products, microfinance institutions empower low-income entrepreneurs—particularly women—to build sustainable livelihoods and break the cycle of poverty.