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Microlending is a type of lending that occurs between person
to person (versus financial institution to person). Microlending agencies are areas where
microlenders and those seeking loans can come to find each other. The loans are provided, mainly to potential
business entrepreneurs in poor countries (or Third World countries). Microlenders provide loans to individuals
financial institutions generally would not because of the risk that exists that
loans would not be paid back.
Microlenders exist because they can potentially stand to make more money
in interest lending than they could from interest earned in a regular savings
account. Microlending agencies can
certainly be seen to contribute to social change around the world because
without them, businesses might not ever get started due to lack of funding, and
communities could stagnate because of the development that would never take
place. Microlending, around the world,
contributes to the social change of poor communities by allowing for progress
to occur where, otherwise, there would be no progress possible.
