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?

Answer
image
Anusha Savla answered.
3 years ago
Follow
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.
1 Views