Microfinance is the service that works in small businesses and individuals to provide financial help to people who are unable to reach a bank for loans or any other financial aids. It includes services like micro credits, microinsurance, and many other such services. Its main target is to reach out to poor people in the country and help them financially. Banks do not usually provide funds to such people as they lack to have a security deposit in return, but with more programs and new rules, the banks have started some schemes to help poor people start their businesses on credit. There are pros and cons of every service and therefore, the pros of microfinance include, education for small children below the age of 14, employment creation plans, initiatives for new business ideas, etc. the money-minded people may find this interesting as the idea is to help the marginal class uplift themselves but this could be done only with a healthy and rich money mindset and to know how the money scarcity mindset works at times like these.
The supporters of the theory suggest that it helps in reducing poverty and empowers women and the weak. As it creates employment opportunities form, and at a single time. It also results in higher income and enables the poor to find employment for themselves thereby improving their standard of living. This idea may not work in poor or developing countries as not many traditional banks can afford to provide credit to people without any security as these people may not be able to pay the amount back. The right and rich money mindset may be to build the assets and provide funds for the poor but the poor tend to utilize these funds and end up being in a worse position thereby leaving the rich with very less or no profits at all and affecting the economic growth of the developing country. Having a big money mindset and the knowledge of rich money mindset may be of use to find a solution to this problem but this idea does not also work in the developing countries as the poor the micro finances to pay their debts and not utilize it for their business thereby ending any opportunity for further profits. The companies and organizations lending financial funds to the poor focus more on the profits rather than helping
the poorest of the poor and therefore the idea becomes a failure in small or developing countries. There might be a solution out there and we need to find it, for that we will have to be guided by the money mindset coach who can provide us the financial literacy and help us have a money mindset makeover, and help strategize the schemes correctly. There is still hope and potential in the idea of microfinance, therefore it is worth a shot.