Microfinance program: a poverty eradication initiative

Microfinance actually, refers to the offering of credit and savings in helping small-scale and medium scale enterprises. With the introduction of microfinance, those lacking the capital to apply credit, mainly the poor, will be able to run their business. Consequently, this will help them to improve their quality of life in the society. In other words, microfinance is in existence as to strategize against poverty by many development agencies. Historically, microfinance started in Bangladesh in 1976. Being an economics professor with University of Chittagong, Muhammad Yunus experimented on the provision of credit to the rural poor. His experiment later developed into the world’s famous microfinance institution, the Grameen bank. Many microfinance institutions replicated its ground-breaking methods in combating poverty (Montgomery & Weiss, 2005).