Microfinance Institutions are Bank-like financial institutions that providing financial services, such as microcredit, micro savings or micro insurance to poor people.
In addition, they also perform the following important functions:
- provide financing facilities, with or without collateral security, in cash or in kind, for such terms and subject to such conditions as may be prescribed, to poor persons for all types of economic activities including housing, but excluding business in foreign exchange transactions
- To buy, sell and supply on credit to poor persons industrial and agricultural inputs, livestock, machinery and industrial raw materials
- To provide professional advice to poor persons regarding investments in small business and such cottage industries as may be prescribed