MODULE 1: Introduction to Microfinance

Microfinance

Encompasses the provision of financial services and the management of small amounts of money through a range of products and a system of intermediary functions that are targeted at low-income clients. Microfinance refers to the provision of small loans and other facilities like savings, insurance, and transfer services to poor, low-income households and microenterprises.

Formal MFI's

These types of institutions are registered, licensed and regulated directly by the Central Bank or through a Third Party. Examples include: Microfinance Companies, Commercial Banks, Rural and Community Banks (Apex Bank), Savings and Loans Companies, and Credit Unions (CUA).

Informal MFI's

These types of institutions are still modernizing. They are often developing their own self-regulatory frameworks while seeking endorsement from Central Banks for these regulatory frameworks. Examples include, susu collectors in Ghana.

Semi‐formal MFI's

These types of institutions are usually registered but not licensed or regulated. This category is also keenly exploring self-regulation mechanisms. Examples include financial NGO's.