Microcredit

The core product of microfinance is microcredit

An extremely small loan to purchase productive assets boosting the poor's revenue allowing repayment over a short period of time in small instalments without the guarantee of collateral. The size of the loan is small in three dimensions

1. in absolute monetary values, as compared to typical business loan, so as to operate in a segment where there is no banking competition;

2. in relation to the borrower's income, so that payback is easier;

3. in respect to the lender's portfolio, so that the default of any single borrower has no impact on its financial soundness.