InvestorQ : What are the features of micro finance institutions (MFIs) in India?
Ashoka Patkar made post

What are the features of micro finance institutions (MFIs) in India?

Anusha Savla answered.
3 years ago
Micro finance institutions, or MFIs, are financial institutions working towards the upliftment of the needy and underprivileged section of the society by providing short-term loans to help them set up their own venture.
These institutions take very calculated risks and fund the interested borrowers to help them get trained, setup and run a small-scale business.
There are a number of features that make the microfinance institutions different from the formal banking organisations. Here are some of the key features of the MFIs in India:
- MFIs offer loans to individuals who belong to the low-income group.
- The loans that are offered by these institutions are of small amount; this is why these loans are known as micro loans.
- MFIs provide loans to borrowers for a short period. After they repay the loan they can again opt for another one.
- MFIs give loans to people who want to start up a business of their own without any security or collateral.
- The repayment frequency of the micro loans offered by MFIs is high and the borrower needs to repay the amount at quick intervals.
- In most cases, the loans are provided by these organisations are for income-generation purposes.