InvestorQ : Who are the customers of microfinance institutions?
Ishita Jain made post

Who are the customers of microfinance institutions?

Anusha Savla answered.
3 years ago

Microfinance institutions (MFIs) are institutions that help finance the poorer sections of the society. MFIs came into existence to help the poorer section of the society that was often left out from the banking system.

The usual customers of microfinance institutions are individuals from the low-income group who don't have access to the conventional banking institutions. The customers are mostly self-employed individuals engaged in self-initiated businesses or are most often home-business entrepreneurs. The customers from the rural areas are generally farmers and individuals who are involved in income-generating activities on a very small scale which include small trades, food-processing, vendoring, etc.

This doesn’t mean that MFI has rural customers only. The customers belonging to urban areas are engaged in more diverse activities such as shopkeepers, artisans, service providers, street vendors and several others.

The customers of microfinance institutions, in rural or urban areas, are either poor people or non-poor persons who are having a very low-source of income compared to others.