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WHAT IS MICROFINANCE?
Microfinance refers to the provision of financial services to poor or low-income clients, more broadly, it refers to a movement that envisions: A world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers.
Microcredit is the extension of very small loans (microloans) to the unemployed, to poor entrepreneurs and to others living in poverty who are not considered bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor.
HOW DOES Om Nava Udya DELIVER MICROCREDIT?
Om Nava Udya has a two part approach to delivery of microcredit:
Urban microcredit:
specialized credit personnel in our head office in Kathmandu and field officers to visit and monitor loan recipients.
Rural microcredit:
specialized loan officers coordinate rural microcredit groups located in impoverished villages supplying additional training, education and capacity building.
Microcredit is a financial innovation which originated in Bangladesh, by Nobel Peace 2006 Prize winner Mohammad Yunus. This initiative has spread globally, where it has successfully enabled millions of extremely impoverished people to engage in self-employment projects that allow them to generate an income and, in many cases, begin to build wealth and exit poverty. The United Nations declared 2005 the year of Microcredit. Since then there has been a growing awareness and interest from the traditional banking sector and the philanthropic sector.