Giving people access to credit & training that can help them move into self employment, freeing them to generate an income that will eventually let them save, send someone to school or build better shelter. Repayment rates tend to be better than for rich borrowers, though interest rates are typically higher because the loans cost more to administer.

Microcredit has evolved into microfinance: services for the poor ranging from health insurance to savings programs. The sector had 107 million poorest of the poor borrows globally at the end of 2007, a 14x increase in a decade.
It has reached the developed world. Grameen Bank branches opened in 2008. The US now has 362 outfits, and loan applications doubled this year.
In Canada, NFLC, Desjardins & Vancity are offering microloans, particularly to immigrants who lack a credit history in this country. Vancity has dispersed almost 400 microloans in the past 4 years, growing about 10%/year, and says need is outstripping its ability to supply the loans.

Other ancillary services – training, business development, health. Financial services with financial education.

- Tavia Grant

Globe & Mail
Nov. 13, 2010