Explanation: The purpose of microfinance is to provide financial services to people who lives in an underdeveloped country and generally excluded from traditional banking channels because of their low, irregular and unpredictable income.
Microfinance banking is the provision of a broad range of financial services such as deposits, loans, money transfers and insurance to the poor and low income household and their micro enterprises at affordable cost. The major aim of a micro finance institution is to provide loans and financial services to underserved populations who otherwise wouldn't have them, while the larger goal is to reduce poverty.
